Tassal capitalises exports by dropping Coles private label salmon and blames global warming
Tassal will stop supplying Coles supermarkets with private label salmon as of 4 June 2016.
The Tasmanian seafood company will also stop a salmon supply contract with Simplot from 30 June 2016.
Tassal said it decided to withdraw tenders for these contracts due to supply issues.
“This decision was taken to ensure Tassal continues to generate sustainable returns moving forward in light of warmer water impacting growing conditions for near term supply,” Tassal said in a statement.
The company said ending the contracts is not expected to impact revenues and earnings going forward.
“Tassal had a long and enduring relationship with Coles,” said Tassal.
“This relationship is not expected to change, and Tassal will continue to supply a wide range of other Salmon and Seafood products to Coles,” the company said.
Tassal says it will now be able to redirect salmon into other domestic markets in order to optimise return. It also stated demand will come from overseas markets.
“The export market continues to present favourable conditions given supply shortages globally that are expected to continue for the next two years, with increased pricing and a low Australian dollar. Tassal will continue to utilise the export market to balance sales volumes in line with optimising shareholder returns,” Tassal stated.
In November 2015 Tassal launched a variety of new innovative and value-adding salmon products into Coles and Woolworths supermarkets across Australia. These products included a ready-to-eat snacks range that combined salmon with rice, beans and quinoa plus ‘salmon rashers’. Salmon rashers are pitched as an alternative to bacon rashers and are well suited as a breakfast food.
Tassal acquired Sydney’s De Costi Seafoods in July 2015 for AUD $50 million plus shares issued over the following three years.
In August 2015 Tassal revealed a 21.8 per cent net profit increase for the 2014 – 2015 Australian financial year.
Coles has since announced that Petuna will take over where Tassal took off in supplying private label salmon to the supermarket. A five year partnership has been established between Petuna and Coles. Petuna’s is based in Devonport, Tasmania and is owned by its founders the Rockliff family along with the Sealord Group.
Coles said it looks forward to continuing a good relationship with Tassal who its its primary supplier of smoked salmon across Australia.