This week in FMCG
As September comes to an end we take a look back at the top headlines in the FMCG sector this week.
Metcash’s largest wholesale supermarket, Drakes, has separated from the company and has opened its own A$125 million state of the art distribution centre in South Australia. The distribution centre is will supply the family owned grocery retailer’s 37 stores in South Australia and is likely to expand supply to its Queensland stores and independents in the future. Drake’s managing director, Roger Drake, told Inside FMCG that he will leave the Metcash/Foodland Group “with mixed emotions”, but said it’s necessary so the company can be more competitive with Kaufland entering the market.
Consumer watchdog ACCC has cleared Saputo Dairy Australia to acquire Lion Dairy & Drinks’ Tasmanian-based cheese business after investigating the impact on the local farming community. The proposed deal includes Lion’s cheese brands such as South Cape, King Island Dairy and Tasmanian Heritage as well as its Tasmanian cheese processing plants in Burnie and King Island. Saputo has an existing milk powder processing plant in Smithton, Tasmania, and last month the ACCC raised preliminary concerns about the imbalance of power that the deal could create, saying that it could lead to dairy farmers being paid lower prices for their milk, but its investigations found most farmers were supportive of the deal.
Supermarket giant Coles saw a 32 per cent increase in the recycling of its soft plastics in FY19 with the introduction of REDcycle bins at the stores. It was the first grocery in Australia to roll out REDcycle bins at all stores last year. The service turns used materials into new furniture, playground equipment and materials for walkways in parks, roads and bollards.
Coles chief property and export officer Thinus Keeve said that the increase in use of REDcycle bins shows that waste reduction is an important issue for customers.
Coca-Cola Amatil (CCA) sealed an exclusive three-year beverage distribution deal with Bankwest Stadium. Amatil will provide non-alcoholic beverages to an estimated 600,000 visitors in the first nine months. The stadium can hold up to 30,000 people and the license covers 27 food outlets inside the establishment. CCA managing director of Australian Beverages Peter West said that the stadium is a “world-class [facility] that has unrivalled portfolio of brands for Stadium visitors.
Dairy giant Fonterra is cutting back the amount of milk it gathers from Australian farmers after the NZ dairy giant posted a $NZ557 million ($A514 million) loss, partly due to the drought in Australia. The dual-listed dairy processor said an increase in Aussie milk prices and input costs due to the big dry spell had necessitated plans to reduce its largest milk pool outside NZ. Instead, Fonterra said it is prioritising its NZ farmers as part of a company-wide shake up, after $NZ826 million of writedown drove the company to its biggest annual loss. Chief executive Miles Hurrell said Fonterra will start rationalising its off-shore milk stock over time.
We’ll be back on Monday with more top FMCG news.