Fonterra Australia has set its sights on boosting its cheese production, purchasing Melbourne-based cheese business Dairy Country for $19.23 million.
Fonterra Australia managing director René Dedoncker said Fonterra had a long and successful history with Dairy Country.
“This acquisition is a logical choice and further supports our strategy to be customer and consumer led, while ensuring we keep pace with the fast-growing cheese category in Australia.
“Dairy Country has two well-equipped secondary processing sites with capability across grating, shredding and block, as well as an experienced workforce.
“For some time we have been looking to bring more of our secondary cheese processing in-house to gain greater end-to-end control over a range of different cheese products and further strengthen our integrated supply chain.”
The acquisition, from food and beverage company Retail Food Group, includes Dairy Country’s processing and packing facilities at Campbellfield and Tullamarine in Victoria, along with related services, intellectual property and the trademark for the Dairy Country brand.
“Having this kind of capability in-house will enable efficiencies and allow us to make the most of opportunities for value creation and product innovation,” Mr Dedoncker said.
Fonterra currently holds a 23 per cent market share in the $2.6 billion Australian retail cheese category with key brands including Perfect Italiano, Mainland and Bega.
The majority of Dairy Country’s permanent employees will transfer over to Fonterra and will continue to work at the Campbellfield and Tullamarine facilities.
RFG executive chairman Peter George said Fonterra was a natural buyer for the business.
The sale is expected to be finalised by October 2020.