A win for Coles, a win for Bega

As part of its “Australian First” sourcing initiative, Coles has awarded its entire housebrand cheese business to Bega Cheese.

The five-year contract means half of Coles’ brand cheese - which is currently sourced from New Zealand - will now be produced in Australia.

Bega Cheese will also source an extra 70 million litres of Australian milk.

They will begin producing Coles brand cheese from February, 2012.

Tuesday’s announcement was attended by Coles merchandise director John Durkan, Federal Government Minister for Agriculture, Fisheries and Forestry, Senator Joe Ludwig, Bega Cheese CEO Aidan Coleman, Australian Dairy Farmers president Chris Griffin and Member for Eden-Monaro Mike Kelly.

In welcoming the guests, local dairy farmer Ken Kimber spoke about the great aspects of farming in the Bega Valley while Mr Coleman said the announcement represented a “landmark achievement”.

“Bega Cheese is undoubtedly one of Australia’s real success stories,” he said.

“It’s a wonderful growth opportunity for Bega.”

Mr Coleman said the contract would inject an extra $30 million into the Australian dairy industry.

“This new contract with Coles means we will be sourcing additional milk from over 400 dairy farmers from across NSW and Victoria,” he said.

“We’ll also approach up to 70 farmers who don’t currently supply Bega and invite them to become part of our milk network.

“Coles have asked us to give them a high quality product, so we’ll be looking for high quality, premium milk.”

Mr Coleman said the partnership would generate 30 new jobs across the company, including in Bega.

Minister Ludwig welcomed the announcement and said the Bega Valley was a “fantastic area”.

“This is one of those opportunities that Ministers like because it gives good news to a good area that deserves it,” he said.

“I applaud Coles for this move – it’s great to see that more Australian product will be available on supermarket shelves.

“I am sure Australian consumers will be equally pleased to be able to purchase a product that supports Australian farmers and industry, with flow-on effects to rural communities.”

Senator Ludwig said Bega Cheese had always met consumer demand while growing and expanding their company.

“Bega Cheese has been operating for over 100 years and employs around 1000 people,” he said.

“This is the next piece of good news for Bega Cheese which is a great Australian company and I applaud the work that they’ve been doing.”

Minister Ludwig said the announcement was testament to the dairy industry’s ability to embrace change and adapt to new conditions.

He said this has helped make it one of Australia’s key agricultural industries, worth $3.45 billion.

Coles’ merchandise director John Durkan said Coles wanted to enter a partnership that saw all its cheese made in Australia.

“It’s an important day for us, as well as Australia’s source policy list,” he said.

“We’re effectively moving 9000 tonnes of cheese from New Zealand to Australia.

“We will see an improvement in terms of quality of product for our customers.

“This is great news all-round.”

Mr Durkan said Bega Cheese was an iconic brand.

“It’s a great outcome for the Bega business and dairy industry,” he said.

“We have a great business partner in Bega… and Bega Cheese is a fantastic company to work with.

“Coles was very keen to partner with an Australian dairy industry processor who could produce all of our cheese locally and not rely on imported product.

“I’m very pleased that Bega will now be producing 19,000 tonnes of great quality Coles’ cheese each year.

“(The contract) further underlines Coles’ commitment to develop long-term, mutually beneficial partnerships with Australian rural producers.”

Member for Eden-Monaro Mike Kelly said the announcement was great for the Bega Valley.

He said it will benefit many people including dairy farmers, their families and the workers at Bega Cheese.

“This is fantastic news and is another step in the success story of Bega Cheese which has given me a lot of personal pride and satisfaction,” Mr Kelly said.

“This isn’t something that Coles was forced into; they are going for a better quality and better efficiency of product.

“It’s an extension of what Bega Cheese has achieved while maintaining a fantastic community spirit.”

Mr Kelly said Bega Cheese was leading the way for innovation in Australia.

“This is an important shift in the way one of our leading supermarkets is sourcing their product,” he said.

Australian Dairy Farmers president Chris Griffin said it looked like a good deal for all parties.

“The returns will align with the export market and across the whole dairy industry, including drinking milk,” he said.