LION Dairy has lost Woolworths’ milk supply contracts in Victoria and Western Australia with the retail giant signing a 10 year deal with Fonterra to supply Victoria, and Brownes landing a seven and a half year agreement for Western Australia. Italian owned Parmalat has also been granted a 10 year milk contract for Queensland and a two year deal for New South Wales.
Lion has secured one year deals with Woolworths in South Australia, Tasmania, and the Northern Territory. Lion has an extensive dairy portfolio in Australia including the Pura, Moove, Dairy Farmers, Big M, and Yoplait brands and has faced significant margin pressure since it lost milk deals with Coles last year. Woolworths says the new long term milk agreements will “allow both farmers and processors to invest and innovate and reap the benefits that come from efficiency gains and increased volumes”.