EDIT: I would not classify it as a terrific deal, these are done hundreds of times per day.
If it respects the wholesale price and delivers the yields its a good deal.
If they have guaranteed payment and minimum purchase qty's (Not typical for PL) it's a REAL GOOD DEAL.
If they have significantly corrupted the cost architecture it's just another of the many "DEALS" that does not help the company and most likely drives it deeper in the hole.
FYI, private label deals / agreements typically only guarantee the consumption or purchase of the customer custom branded (only) packaging. If there are snap-on parts that allow for custom coloring etc, they typically guarantee that as well.