Farmers from the Shoalhaven region are considering an offer from Devondale/ Murray Goulburn Co-operative (MG) to supply milk to supermarket giant Coles on a 10 year contract.
The dairy Co-operative discussed plans for a new milk processing facility and future milk supply with local dairy providers and farmers at the Bomaderry Bowling Club last Thursday. The local producers appear to be cautiously interested in the proposal according to the South Coast Register.
“They want to know if this is an opportunity or a threat,” said Dairy Connect Consultant Mick Logan.
Local dairy farmers appear to be interested in the offer providing that an appropriate price is negotiated according to local farmer, Col Walsh.
“They said that they would give us the market value, I’m hoping they can offer more,” said Walsh.
Walsh also explained that despite an attractive ten year contact many farmers remain wary of locking in contracts with either of the supermarket giants.
“Farmers are now sceptical about partnerships with big companies like Coles and Woolworths.”
The new Devondale/ MG processing plants are said to be built in Melbourne and Sydney with operation commencing on 1 July 2014 following the finalisation of the contract with Coles.