Major Aussie Cheese Brand Sold at Woolies and Coles COLLAPSES

The Beston Global Food Company, which is based in South Australia, has entered voluntary administration.

The company cited high operating costs as one of the reasons for its decision to call in the administrators.

This comes just two weeks after Canada’s Saputo Inc. announced that it would be shutting down King Island Dairy, which has been a prominent dairy brand for over a hundred years.

Beston, which produces various dairy products under multiple brands, including Mabel and Edwards Crossing, appointed Tim Mableson, David Kidman, James Dampney, and Gayle Dickerson as its voluntary administrators.

The company’s two facilities in South Australia, which process milk, mozzarella, and butter, are affected by the voluntary administration. Becton produces the lactoferrin, which is utilized in infant formula.

As administrators, the group has taken over the company’s operations. They plan to continue trading while a review of the business is carried out. Mableson noted that their priority is to stabilize the company.

The administrators intend to work with various stakeholder groups to find the best outcome for the company. They are also exploring the possibility of selling the business or recapitalizing it.

Mableson noted that the company has significant assets and a strong relationship with its local dairy farmers.

Despite the positive financial performance of the company during the fourth quarter of FY24, Beston Global Food noted that it had been experiencing challenges.

In July, it announced that it had sold its meat processing subsidiary to a group led by Milne Bay for $4 million. The funds from the sale were used to pay down debt.

In a statement, the company noted that it had failed to secure a deal to acquire its plant in Jervois, South Australia, from Japan’s Megmilk Snow Brand Co..

The agreement was among a number of non-binding proposals that Beston received in the past few months.

The company noted that it was disappointed by the development, as it had hoped that the proposed acquisition would allow it to capitalize on the progress that it had made in building its operations and secure the jobs of its employees.

However, on September 20, 2019, Megmilk Snow Brands informed the company that it would not be proceeding with the proposed acquisition.

In a statement to the Australian Securities Exchange, Beston noted that the offer was no longer open. The company attributed the various factors that have affected its operations to a sudden change in its business environment. It noted that the increasing interest rates had also affected its financial position.

In addition, the company noted that its operating costs had been significantly high due to the high energy prices that have been affecting its operations.

The Australian Dairy Code, which was introduced in 2019, had also been contributing to the high prices that have been affecting the company’s operations.

In FY23, Beston was forced to absorb an additional $28 million in costs due to a 300 percent rise in energy prices.

The company noted that these costs were largely due to the persistence of cost increases, particularly in the areas of electricity, gas, transport, labor, chemicals, and farmgate prices.

As a result, its cash flows and profits have been adversely affected.