Beston Global Food to Wind Down Operations After Failed Sale Attempts
Source: DairyNews.today
Beston Global Food Company (ASX: BFC), a leading South Australian dairy producer, will wind down its operations after voluntary administrators from KPMG were unable to secure a buyer for the business.
The company, known for brands like Edwards Crossing and Mable's and products such as mozzarella, butter, and lactoferrin used in infant formula, has been struggling under high production costs and volatile global dairy prices.
Despite posting strong performance in FY24 with record milk flows and steady sales of $170 million, Beston’s financial troubles intensified as the company faced mounting debt—$67 million drawn fr om various lenders, including National Australia Bank (ASX: NAB). After entering administration in September, the company attracted interest from Japanese conglomerate Megmilk Snow Brand, which initially made a non-binding offer for Beston’s cheese and lactoferrin production facilities in South Australia. However, the offer was withdrawn within weeks, and the search for a buyer was unsuccessful.
Administrators announced that, due to significant weekly trading losses, the company will cease milk production on December 6, 2024, and begin an orderly wind-down. Attempts to sell the business as a going concern failed, with potential buyers unable to present binding offers within the required timeframe.
A second meeting of creditors is expected in late January or early February 2025, wh ere they will decide on the company’s future, either through liquidation or a Deed of Company Arrangement (DOCA).
The closure will impact 159 employees and 22 dairy farmers, with an estimated $10 million in unpaid milk deliveries to be left unresolved. The South Australian Dairyfarmers' Association (SADA) has expressed disappointment, highlighting the loss of valuable dairy infrastructure and the blow to the local industry.
SADA President Rob Brokenshire stated, “This outcome is extremely disappointing, but we remain committed to strengthening the South Australian dairy industry through the Dairy Industry Action Plan 2024-2029.”
Beston’s decline marks the second time in a decade that its Jervois and Murray Bridge facilities have faced financial instability, underscoring the challenges within the regional dairy sector.
Despite posting strong performance in FY24 with record milk flows and steady sales of $170 million, Beston’s financial troubles intensified as the company faced mounting debt—$67 million drawn fr om various lenders, including National Australia Bank (ASX: NAB). After entering administration in September, the company attracted interest from Japanese conglomerate Megmilk Snow Brand, which initially made a non-binding offer for Beston’s cheese and lactoferrin production facilities in South Australia. However, the offer was withdrawn within weeks, and the search for a buyer was unsuccessful.
Administrators announced that, due to significant weekly trading losses, the company will cease milk production on December 6, 2024, and begin an orderly wind-down. Attempts to sell the business as a going concern failed, with potential buyers unable to present binding offers within the required timeframe.
A second meeting of creditors is expected in late January or early February 2025, wh ere they will decide on the company’s future, either through liquidation or a Deed of Company Arrangement (DOCA).
The closure will impact 159 employees and 22 dairy farmers, with an estimated $10 million in unpaid milk deliveries to be left unresolved. The South Australian Dairyfarmers' Association (SADA) has expressed disappointment, highlighting the loss of valuable dairy infrastructure and the blow to the local industry.
SADA President Rob Brokenshire stated, “This outcome is extremely disappointing, but we remain committed to strengthening the South Australian dairy industry through the Dairy Industry Action Plan 2024-2029.”
Beston’s decline marks the second time in a decade that its Jervois and Murray Bridge facilities have faced financial instability, underscoring the challenges within the regional dairy sector.
