Saputo Dairy Australia (SDA) has finalised the sale of two of its fresh milk processing facilities to Coles Group, a process that began in April 2023 and warranted a review by the Australian Competition and Consumer Commission (ACCC).
In April 2023, Coles entered into a binding agreement to acquire two automated milk processing facilities from SDA for approximately $105 million. SDA had intended to optimise its operating model by selling its manufacturing sites at Laverton North in Victoria, and Erskine Park in New South Wales.
The ACCC and industry participants raised concerns in July and delayed the process, as it would be the first time a supermarket would own and operate its own milk processing facilities, and could negatively impact market structure. However, the deal was given the green light in December, and both companies announced it had been finalised this week.
Saputo said that the deal will allow the company to maintain its farmer relationships in the region, and continue to have its products processed at these sites. The 48 staff members that were employed at the sites have been transferred to Coles, and the teams will be led by Coles general manager Dairy operations, Ian Bell.
A Coles spokesperson said that the deal allows the company to build on the strong relationships it has developed with dairy farmers, from which the Coles sources over 200 million litres annually for its fresh milk products.
“Each facility in Laverton North and Erskine Park has the capacity to process about 225 million litres a year and are predominantly used today to process Coles Own Brand 2L and 3L milk,” the spokesperson said.
“All of the on-site employees have continued in their roles as Coles team members. We are proud to continue to invest in the future of the Australian dairy industry, supporting local farming and product innovation.”
