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Metcash deal enables meat supplier to map out fresh business direction

NATIONAL retail distributor and IGA supermarkets owner Metcash has bought its first fresh meat supplier, buying Osborne Park business Fresh Market Meats, for an undisclosed sum.

Established in 1989, the Osborne Park meat wholesaler supplies about 70 independent supermarkets across metropolitan and regional Western Australia, including IGAs, Farmers Jacks and Fresh Provisions stores.

Founder Mike Collett said most of the company's growth had occurred during the past four to five years, after it became the first fresh meat packager in WA to use the MAP packaging system.

The system involves modifying the composition of the internal atmosphere of a package to inhibit growth of bacteria and improve shelf life.

The system opened up greater market opportunities for the business, which has since increased its staff numbers from 10 to 32 and experienced a 60 per cent increase in sales revenue each year over the past four years.

"We were the first in WA to go into MAP, and our business has grown dramatically since then," Mr Collett said.

Metcash's purchase of the business was settled last week after lengthy negotiations, with Mr Collett agreeing to stay on board during the three-month handover period.

After that, he will embark on his next business venture - buying a charter vessel and conducting luxury cruising tours in the north of the state.

"I've got a commercial skipper's ticket, it's always been a passion of mine," he said.

Fresh Market Meats is Metcash's first acquisition of a fresh meat operation anywhere in Australia.

The company will ramp up the operation to service other larger format IGA stores and other independent supermarkets across WA.

Metcash also runs a boning facility in Malaga, and the two will work together to supply both small and large format IGAs and other independent supermarkets.

There are about 279 IGA stores in WA.

"Metcash is expanding its fresh operations across Australia, and this is part of that expansion," a Metcash spokesperson told WA Business News.

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Metcash (MTS)

Share Price

Closing price for the last 90 trading days
Source: Morningstar

Total Shareholder Return as at 29/06/18

1 year TSR5 year TSR
382ndMetcash13%-3%
722 WA (and selected non WA) listed companies ranked by 1 year TSR relative to other companies with similar revenue
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