Coles signs 10-year lamb supply deal

Retailing giant Coles has moved to further secure the long-term supply of fresh produce to its 770 supermarkets.

The Australian Lamb Company and Coles have signed a 10-year deal.

Retailing giant Coles has moved to further secure the long-term supply of fresh produce to its 770 supermarkets, with its first 10-year meat contract signed last week.

The deal with western Victorian specialist sheep and lamb processor, the Australian Lamb Company, locks in the Colac-based meatworks to slaughter, bone out and retail-pack a minimum of 1.1 million lambs a year for Coles.

The massive Coles contract for the family-owned processor comes on top of the 1.7 million lambs and sheep it kills annually now for export to customers in 69 countries.

It is a bonanza for the fast-growing ALC, founded and jointly owned by the Verrall and Zarpellon families 23 years ago, which will allow the Colac business to invest $30m in the expansion and modernisation of its meatworks and boning rooms before the 10-year contract starts in November.

ALC’s win is a loss for Brazilian-owned JBS, previously the major specialist processor of lamb meat for Coles. Gundagai Meat Processors in NSW will continue to also slaughter Coles’ lambs.

ALC managing director John Verrall described the deal as a massive boost for his company, and for the Colac region.

He will now employ 60 extra workers as his business increases its processing capacity to 12,000 lambs a day, with 690 staff working in two shifts at both Colac and in ALC’s secondary boning-out and retail packing facility in Melbourne.

“We are one of the largest employers in the region and, over the 10-year life of the contract, we expect to contribute around $300m of wages and purchasing to the local economy of Colac and surrounding districts,” Mr Verrall said.

“It is a very significant partnership.

“It will deliver a level of ­certainty and security for our business and provide a solid ­platform for Australian Lamb Company Group in new and ­existing markets.”