An award-winning dairy manufacturer has gone bust.
Beston Global Food Company announced it is under voluntary administration in a statement to the n Stock Exchange.
The SA based firm employed 159 workers and was the parent company behind the Edwards Crossing and Mable’s brands – which were both available for sale in supermarkets across the country including Woolworths, Coles and IGA.
Beston has received 134 awards including the champion cheddar cheese at the 2019 SA Dairy Awards, the best n mild cheddar at the 2019 International Dairy Awards, and a 2018 gold medal at the Royal Sydney awards for its vintage cheddar.
KPMG has taken control of the company, which is among the largest SA dairy exporters.
In addition to its well known cheeses, the company also sold whey and lactoferrin protein to supplement manufacturers, including Chinese baby formula makers, and its factories also produced milk and butter.
There are concerns the firm’s collapse could have a knock-on affect for the SA diary industry with administrator Tim Mableson saying a major focus would be to try and stabilise the business so it could be refinanced or sold.
Beston blamed its collapse on the high cost of energy and a dip in farmgate milk prices. It also said successive interest rate rises over the previous two years had increased the company debts.
Beston has two factories at Jervois, south-east of Adelaide, and at Murray Bridge as well as established relationships with SA and western Victorian diary farmers and international buyers.
It had been in talks with Japanese dairy giant Megamilk Snow Brand to purchase the Jervois production facility, but this fell through last week.
‘The Megmilk offer would have enabled all of the jobs at Jervois to be preserved and would have led to an increase in demand for milk for processing at the Jervois factory over time,’ CEO Fabrizio Jorge said.
Beston first listed on the ASX in 2015 at 35 cents per share. The company last traded in June at 3 cents per share.
‘Over the last 12 months, Beston has experienced exceptionally high operating costs, particularly due to onerous energy prices at a time when n farm gate milk prices have been uncompetitive in world markets,’ a statement to the ASX said.
The statement also said the n Dairy Code legislation had unintentionally made it more difficult for diary processors.
‘(It) does not recognise the volatile nature of dairy markets globally, nor allow appropriate price signals to be captured through the movements in supply and demand and has contributed to the closure of 11 dairy processing businesses in during the past 18 months,’ it read.