Murray Goulburn gets a slice of Coles' cheese

Murray Goulburn has signed a five-year national private label contract to supply Coles-brand Australian cheese.

The move is part of MG’s ongoing push to secure critical mass in Australia's dairy foods market.

MG said it would invest up to $145 million to significantly increase its ‘ready-to-serve’ cheese capacity and capabilities at its new consumer cheese plant in Cobram in Northern Victoria.

Managing director Gary Helou said MG would use “world-leading technology” for processing and packaging the blocks, slices, snacking and shredded cheese.

The announcement follows the landmark 10-year partnership MG commenced with Coles in 2014 to supply daily pasteurised milk for Coles private label brands in Victoria and NSW.

The national cheese contract will generate approximately $130 million in additional sales per annum.

Helou said MG was pursuing a growth and value creation strategy to deliver profitable growth and insulation from the challenges of volatile global dairy commodity prices.

“As part of this we are ramping up our manufacturing capability and capacity to produce and market a wide range of Australian made ‘ready-to-consume’ dairy foods for our domestic and international markets,” he said.

“This additional Coles business complements our investment strategy to build a state-of-the-art supply chain and adds to our critical mass here in Australia, as we look to substantially grow our business internationally."