SYDNEY, July 29 (Xinhua) -- Woes for Australian dairy cooperative Murray Goulburn have become worse after losing a key supply contract.
Murray Goulburn will take a 108 million-Australian-dollar (81.31 million U.S. dollar) revenue hit after losing the supply contract for Woolworths Ltd's private label UHT milk, milk powder and cream products after the giant chose rival processor Bega Cheese.
The company said the tender loss is not indicative of a breakdown in the broader relationship as its own brands won't be affected by the decision, Murray Goulburn Interim Chief Executive David Mallinson said in a statement to the ASX on Friday.
"We believe our tender to retain this business was competitive, whilst balancing acceptable returns for our products given the current environment for our farmer/suppliers and investors," Mallinson said.
The contract loss is another blow for the struggling dairy producer's farmers after it announced a surprise retrospective cut to farmgate milk prices and two significant profit downgrades which saw its chief executive and financial chiefs leave the company.
Murray Goulburn said the contract will have a negligible impact to 2017 financial earnings as it redirects the capacity to other markets.
By 1415 local time (AEST), Murray Goulburn's shares had slumped 8.80 percent to 1.14 Australian dollars (85.83 U.S. cents), while rival Bega and surged 6.90 percent to 6.20 Australian dollars (4.67 U.S. cents).
