In Switzerland, I have found Kollege to mean nothing BUT friend...
I am Swiss. You are right, it can mean the same, but I myself differentiate between "Kollege" and "Freund". To me "ein Freund" is someone who is closer or more familiar to me than "ein Kollege".
What is wrong with coworker as a single word?
So, what is wrong with "My co-worker handles products"?
I believe "handeln mit" can also be translated as "deal IN" - and that both versions should be accepted.