Australian wholesaler Metcash stands to lose $420 million in sales in the 2011 financial year following Woolworths’ decision to cancel its supply contract in Queensland with the company’s liquor division.
Woolworths is commissioning a distribution centre in Queensland to service its own supply requirements.
“We have made no secret of the fact that Woolworths would eventually look to service its Queensland liquor business via its own distribution solution,” said Metcash CEO Andrew Reitzer in a statement.
“While the loss of the Woolworths volume will have a financial impact on the ALM business and Metcash Group in our 2011 financial year, we have already commenced strategic initiatives to replace some of the lost volume and reduce costs accordingly.”