Danone to go head-to-head with Fonterra and Parmalat

Posted by Janice Wong on 18th May 2010

French food giant Danone is to enter the Australian market through a dairy products venture with local milk co-op Murray Goulburn. Products from the venture are scheduled for launch next year but Murray Goulburn MD Stephen O’Rourke said on Friday (14 May) the companies could “enter the Australian yoghurt market with confidence”.

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The venture will use Murray Goulburn’s site at Kiewa in north-east Victoria and is expected to boost jobs at the facility. Danone has sent a warning to the likes of Fonterra and Parmalat that the French food giant will use its “expertise” in brands to gain a foothold in Australia’s dairy sector.

The Actimel and Activia maker is to join forces with Australian milk co-op Murray Goulburn to produce and sell dairy products, including yoghurt, in Australia.

The venture will start to introduce a range of fresh dairy products from next year, although Danone refused to give specific details on the planned timetable.

Danone, in its first foray into Australia, will be competing with some big brands, particularly in yoghurt, including Fonterra’s Ski and Parmalat’s Pauls.

Nonetheless, a spokesperson for Danone told just-food that the French group and its Australian partner could grow its share of Australia’s fresh dairy sector.

“Yes, the market is competitive but we have strong brands and we will build strong relationships with the supermarkets and consumers and respect the challenge of competing against the strong companies and brands in the fresh dairy market. Both Murray Goulburn and Danone have many years of experience in growing market share,” the spokesperson said.

The Australian market for yoghurts, yoghurt desserts and drinks is worth almost US$1bn in retail sales annually, the spokesperson said and Danone was looking to launch a number of products in the country.

“The plan is to provide a wide-range of Danone’s products over time. This is based on yoghurts and other fresh dairy products,” she said. “But I cannot provide specific comment on the product schedule, it is too early to say.”

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