Warrnambool dairy signs exclusive Coles deal

Jane Harper
Herald Sun
January 20, 2012

A VICTORIAN dairy will launch its products to a national market after snaring a five-year deal with supermarket giant Coles.

Warrnambool Cheese and Butter will sell its Great Ocean Road brand products through Coles stores from early May. The boost in production is expected to create 35 jobs for the region.

Marketing analysts said the deal was likely to improve the public perception of Coles, which will stock the brand exclusively.

The retail giant was panned for its approach to the dairy industry last year when it cut house-brand milk prices to $1 a litre.

Phil McDonald, managing director of advertising agency George Patterson Y&R, said: “I think it makes perfect sense for Coles to be seen giving something back to the industry.”

“It is not only good from a marketing sense, but also something they should do as a conscientious business.”

The 123-year-old dairy, which listed on the Australian Securities Exchange in 2004, said the partnership would help it expand both the business and its product range.

“This partnership allows us to expand our domestic footprint so it’s very good news for us and our stakeholders,” Warrnambool Cheese and Butter chief David Lord said.

The dairy has a market capitalisation of $212 million and is one of the largest employers in southwest Victoria, having about 300 staff at its site in Allansford, east of Warrnambool.

Coles said the partnership demonstrated the group’s support for Australian dairy processors.

“Warrnambool Cheese and Butter is an outstanding Australian dairy producer with a pedigree stretching back over 120 years,” Coles merchandise director John Durkan said.

The dairy began making cheese under the Great Ocean Road brand six years ago, primarily for the US.

The dairy is expected to supply a minimum of 4000 tonnes of cheese each year.

Warrnambool Cheese stock gained 2.36 per cent at $3.90.