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- Wattle Health Australia (WHA) has entered a 10-year supply agreement with Chemist Warehouse for its organic certified nutritional dairy range
- Wattle’s products will now be supplied to Chemist Warehouse’s 450 stores across Australia
- Over the first five years of the agreement, Wattle will spend $1.2 million annually in marketing support to build brand awareness, sales and loyalty
- However, this agreement is subject to Wattle finalising the proposed acquisition of Blend and Pack
- Wattle’s share price is trading steady today with shares trading for 47.2 cents apiece
Wattle Health Australia (WHA) has entered a 10-year supply agreement with Chemist Warehouse for its organic certified nutritional dairy range.
Over the first five years, Wattle will spend $1.2 million annually in marketing support to build brand awareness, sales and loyalty.
Its nutritional dairy range, Uganic infant formula and Little Innoscents organic skincare range will now be available in as many as 450 Chemist Warehouse stores across Australia.
Chemist Warehouse is the largest pharmacy chain in Australia with over $5 billion in sales annually from its stores in Australia, New Zealand and China. Infant formula sales represent over $200 million of this revenue.
“It’s an important addition to Wattle Health’s vertical integrate supply chain which extends from securing supply of Australian certified organic fresh milk through to a dedicated organic spray drying facility,” Wattle Health CEO Lazarus Karasavvidis said.
As part of this agreement, Wattle Health will supply Chemist Warehouse with equity on specific milestones.
A total of three million fully paid shares will be issued on the signing of the long-term supply agreement and five million shares if Chemist Warehouse chooses to provide equivalent value in marketing support and the ranging of the Uganic infant formula range.
Wattle will also issue more than 10 million shares when Chemist Warehouse provides equivalent value in marketing support and the ranging of its proposed certified organic A2 protein-based infant formula range.
Finally, Wattle will issue 1.1 million shares for professional services that are required to establish and complete the deal.
“Chemist Warehouse is committed to bringing the best brands and value to our customers,” Chairman and Co-Founder of Chemist Warehouse Jack Gance commented.
“Increasingly, consumers around the world show a preference for products, particularly infant formula, that are certified organic and produce the highest standards, especially from Australia,” he added.
However, this agreement is subject to Wattle finalising its proposed acquisition of Blend and Pack and obtaining shareholder approval for the purchase.
This is also subject to Wattle raising a minimum of $62 million via a rights issue by December 31, 2019 and any issue of securities under this agreement is also subject to shareholder approval.
Wattle’s share price is steady today with shares trading for 47.2 cents apiece at 12:46 pm AEDT.
