The Metcash Limited (ASX: MTS) share price is up 0.85% after the company announced a new agreement.
Metcash is a leading wholesale distributor of supermarket products and the owner of popular retail brands like IGA, Mitre 10 and Foodland. In liquor it owns The Bottle-O, Cellarbrations and Duncans.
Metcash’s New Agreement
The wholesaler announced that it has entered into an agreement with Drakes Supermarkets to supply its stores in Queensland for a further five years. The existing agreement expired yesterday, 2 June 2019.
Roughly a year ago Metcash announced that Drakes Supermarkets wasn’t going to commit its supermarkets in South Australia to be supplied from Metcash’s new distribution centre in Adelaide.
Metcash also entered into a new supply agreement with Drakes Supermarkets to supply its Foodland supermarkets in South Australia to 30 September 2019, which may, at the option of Drakes Supermarkets be extended up to 30 September 2020.
I’m uncertain about Metcash’s food future with how competitive the landscape is with Aldi, Costco, Amazon, Coles Group Limited (ASX: COL) and Woolworths Group Ltd (ASX: WOW).
I’d rather own shares of one of the reliable ASX shares in the free report below.
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