Brambles Limited (BXB) inked a new agreement to supply pallets to US retailer Wal-Mart that would increase its costs by US$5 million ($7.5 million) per annum from 2010. The company said that the new arrangement would have no impact on sales revenue or issue volumes.

Brambles said under the new agreement, Wal-Mart's third party service providers would inspect CHEP pallets at either their facilities or at Wal-Mart distribution centers with pallets meeting CHEP's quality criteria reissued directly to CHEP manufacturer customers.

"Pallets requiring repair will continue to be processed at CHEP service centers before being reissued to customers," the company said in a statement.

Brambles said the company incurred U$10.9 million in costs last year from temporary deals with Wal-Mart after the company decided to review its pallet supply and management arrangement.

The company confirmed that it would incur another US$30 million before tax in similar costs for the current financial year.

CEO Mike Ihlein said the relationship between Walmart and CHEP was a very important one.

"Together we have been able to develop a solution that maintains the benefits of Total Pallet Management for the overall supply chain," he said.

At 1042 AEST shares in BXB were up 30c or 4.1% to $7.65.