Fonterra is set to acquire Dairy Country for $19.23 million. The company currently holds a 23 per cent market share in the Australian retail cheese category with brands such as Perfect Italiano, Mainland and Bega.

The acquisition from Retail Food Group, which is subject to regulatory approvals, will include the two Victorian packing and processing facilities, as well as related services, intellectual property and the trademark for the Diary Country brand.

The Australian retail cheese category is worth around $2.6 billion.

Fonterra Australia managing director René Dedoncker said it had been looking to bring more of its secondary cheese processing in-house for some time to gain “greater end-to-end control over a range of different cheese products and further strengthen our integrated supply chain”.

“Having this kind of capability in-house will enable efficiencies and allow us to make the most of opportunities for value creation and product innovation,” said Dedoncker.

“This acquisition is a logical choice and further supports our strategy to be customer and consumer led, while ensuring we keep pace with the fast-growing cheese category in Australia. 

“Dairy Country has two well-equipped secondary processing sites with capability across grating, shredding and block, as well as an experienced workforce.”

Fonterra said the majority of Dairy Country’s permanent employees are expected to transfer to Fonterra, and will continue to work at the Campbellfield and Tullamarine facilities.

Dairy Country was first established to produce home-brand cheese products for the Australian foodservice market and help meet the shredded cheese demands of pizza comapanies, and today works with some of Australia's most prominent food brands.

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