Thursday, 11/04/2013

Dairy farmers who supply Coles through the processor Lion, say they have 15 months to decide on how they will deal with changed milk supply arrangements.

Coles announced yesterday it will dump Lion in parts of the eastern states, because it’s struck longterm direct deals with farmer cooperatives Murray Goulburn and Norco for its private label milk.

Murray Goulburn is investing $120 million in building milk processing plants in Melbourne and Sydney in time for the switch mid-next year.

Lion will continue to produce its branded dairy items for Coles.

Ian Zandstra, the chairman of the Dairy Farmers Milk Cooperative, says farmers currently produce 700 million litres for Lion but that could change.

“Our farmers are now in the process, it’s in the mail, offered new contract volumes for the next year, that will be an increase in most areas.

“A year to think it over, whether we supply MG.

“A year to think things over and bed things down.”from ABC