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A selection of packaged groceries and household products will be white labelled under the Coles brand

Sainsbury’s has partnered with Australian supermarket group Coles to sell its own-brand range of groceries in the country.

The retailer said the agreement in Australia marked “a key milestone” in its strategy to build a wholesale business.

From early next year, Sainsbury’s will supply a selection of packaged groceries and household products to Coles, Australia’s second largest food retailer, with 2,400 sites, including 800 supermarkets and 700 convenience stores. The range will be white labelled under the Coles brand.

Sainsbury’s will also explore the possibility of selling Australian groceries and alcohol - sourced from Coles suppliers through the new partnership - in the UK.

“Coles is one of Australia’s leading food retailers and we are delighted to enter into this new partnership with them,” said Michael Luck, director of business development at Sainsbury’s.

“Great quality food, high standards and ethical sourcing are at the heart of both our businesses and we are delighted to work with Coles to bring more choice and innovation to Australian customers. We’re excited by the opportunity to offer more of our fantastic products to customers around the world through wholesale partnerships like this one.”

Greg Davis, Coles chief executive of commercial and express, added: “We want to accelerate the introduction of innovative products to Coles own brand, and this partnership allows us to do that with a range of food and groceries that are already proven in the international market but not yet available in Australia.

“This deal will free up resources for our own product development team so that they can drive further innovation and help us fulfil our strategy to make Coles an own-brand powerhouse.”

Sainsbury’s already has a number of wholesale partnerships in place in Asia, Europe and the UK. Last month, it struck a deal to replace Waitrose and Iceland as the supplier for Shoprite, a community food store chain with nine supermarkets on the Isle of Man. The long-term supply agreement is set to start in January 2020 and includes about 3,000 own-label products.