SUPERMARKET chains Coles and Woolworths are resisting Goodman Fielder's attempts to slash the cost of distributing bread, undermining a key component of chief executive Chris Delaney's turnaround strategy for the consumer foods giant.

 

Concerns voiced by Coles and Woolworths come as Mr Delaney prepares to detail plans to merge his Australian baking and home ingredients businesses, cull products and brands and restructure the manufacturing and supply chain operations.

 

Goodman Fielder has been in discussions with Coles and Woolworths about reducing supply chain costs by delivering bread to their distribution centres rather than to supermarkets.

 

"I don't ever see it going through our DCs [distribution centres] – never say never, but I don't see it like that," Coles director of merchandise John Durkan told The Australian Financial Review.

 

"I would imagine if you're a big manufacturer instead of going to 700-plus locations if you only had to go to 40 [DCs] that would be a whole heap better," he said. "But it's such a daily product I can't see how we would ever add value in that part of the supply chain. It's quite a complex subject and it's something that hasn't been touched for 20 years."