Coles signs deal to please farmers and consumers: Midday roundup

Grocery giant Coles has reached a 10-year deal with supplier Murray Goulburn which cuts out the middle man in the production of its private label products.

Australia’s biggest milk supplier, Murray Goulburn, will supply daily pasteurised milk to the supermarket for its home-brand products in Victoria and New South Wales from July 2014, as part of the exclusive deal.

Murray Goulburn, which produces the brand Devondale, plan to invest $120 million for the construction of two new milk processing plants which will be built in Sydney and Melbourne, in what it calls the “most significant investment in dairy production technology since the dairy industry was deregulated in 2000”.

In a statement, Coles said the arrangement was a “win” for farmers and consumers.

“The new contracts are a major win for farmers because we cut out the middle man and farmers get a bigger share of the retail price.

“It is also a win for consumers because we can sustain affordable milk prices,” Coles says.

Service Stream awarded Telstra contracts

Service Stream, a key contractor for the National Broadband Network, has just been awarded new contracts from Telstra.

The company said in a statement this morning, posted on the Australian Securities Exchange, it had been granted a new two-year fibre contract for commercial estates in a deal worth $30 million, along with another renewal of a $55 million contract.

The company has also been granted an extension of a site acquisition, environment and design contract worth $50 million.

Executive director Brett Gallagher said in a statement the contracts showed “the continued confidence that Telstra has in our ability to deliver essential network services”.

Shares steady on open

The sharemarket has opened flat this morning, despite overnight gains in overseas markets.

The S&P/ASX200 benchmark was down 15 points at midday to 4961.8.

Surfwear brand Billabong’s shares have dropped 26.03% to $0.54, as it’s likely the company will be sold for $0.60 a share, down from the original offer of $1.10.

The Dow Jones Industrial Average closed up 0.41% on yesterday to 14673.46.