Woolworths (WOW) has signed a three-year private label bread agreement with UK-owned George Weston Foods as it seeks to shore up long-term arrangements for its store brand products, according to The Australian Financial Review.
The deal follows on the heels of an agreement with New Zealand dairy firm Fonterra to supply milk for Woolworths’ private label products over the next 10 years.
The $50 million contract with George Weston Foods is the longest bread deal Woolworths has ever agreed and continues a relationship that has been renewed annually over the past decade, the AFR said.
It is believed there are no clauses in the deal that would see George Weston receive more cash should food commodity prices rise dramatically. However, the baker will receive higher prices for the second and third years of the deal.