Fonterra Australia has secured a ten-year contract from Woolworths to supply and process the retailer’s own brand milk in Victoria.
The deal allows farmers to further invest in their businesses as they have a guaranteed buyer for their milk, the co-operative said.
To cater to the deal, Fonterra will invest over $30m at its milk processing plant in Cobden, South West Victoria, a move which will create 30 new jobs.
Woolworths Supermarkets managing director Tjeerd Jegen said that the new contract will be a win for farmers, Woolworths customers and Victoria.
"We want farmers and Fonterra to provide quality milk for our customers. Fonterra has told us that with the certainty of a long-term contract they and their farmers can invest and innovate," added Jegen.
"These new contracts mean local farmers will supply Victorian milk to Victorian families."
Fonterra Australia managing director Judith Swales said, "Using Fonterra's global innovation leadership and the high-quality milk from our farmers, we can optimise the freshness and shelf life of milk to ensure a better product for Woolworths Victorian customers."
The upgraded Cobden facility is scheduled to enter operations in early 2015.
