Independent grocery wholesaler and distributor, Metcash, will supply grocery and liquor products to the 45 supermarkets and eight associated liquor stores that Foodworks is acquiring from Coles.

The first store supply is expected to begin in October with all stores in the agreement supplied by Metcash by the end of April 2010. The supply agreement is for a 10 year period.

It is expected the additional Foodworks stores will add sales worth $250 million to Metcash within the first 12 months.

The existing 700 Foodworks-aligned customers have a supply contract with Metcash extended to 2019. Metcash

CEO Andrew Reitzer said ñThe FoodworksÍ brand is well recognized in the market place and espouses common themes to those championed by Metcash; namely, tailoring independent stores to suit their local customer base and the communities in which they operate.î

The companyÍs grocery distribution business IGA has helped the Foodworks stores increase their sales from $450 million to $1.75 billion over the last seven years.