Beston Global Food Company collapses; workers deserve support, MP says

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More than 150 dairy industry workers will need government support when the Beston Global Food Company shuts down in a week’s time, the state opposition says.

The company, which operates factories at Murray Bridge and Jervois, will take its final milk deliveries next Tuesday and cease production next Friday, December 6.

As well as leaving those workers without jobs, Beston’s collapse will also leave around 40 dairy farmers stuck with unpaid debts worth millions of dollars.

Opposition primary industries spokeswoman Nicola Centofanti called on the state government to step in and help those affected.

“This is a sad time for the dairy industry here in South Australia,” she said.

“This news that many dairy farmers aren’t going to be paid for their product, nor honoured their contracts, comes at a time when their backs are against the wall because of the drought, frosts and cost of doing business pressures.

“Let’s hope that the affected workers are helped and provided support, given the time of the year.”

Tragedy had been looming for years

Beston Foods had been placed under administration in September, with significant debts and cash flow problems, after a proposed sale to a Japanese firm fell through.

Those problems had been growing since the arrival of the COVID-19 pandemic in 2020-21, when the company made a loss of close to $22 million.

On Tuesday, in a statement, administrators KPMG said several alternative buyers had expressed an interest over the past two months, but none had put forward a binding offer.

Ultimately, “significant trading losses” had made it impossible to keep the company’s doors open any longer.

“The administrators have been left with no alternative but to wind down the business and begin an orderly sale of its assets,” they said.

“Detailed findings about Beston’s affairs will be reported to creditors in due course and as part of the normal administrative process.”

A meeting of creditors will be held in January of February to determine the best way forward: liquidation, meaning a sale of any company assets to the highest bidders; or a deed of company arrangement, an alternative agreement between the company and its creditors.

Beston will continue business as usual until the shutdown.

Aside from its financial troubles, the company will be remembered for producing high-quality products, including cheddar and mozzarella cheeses that were each named the best in Australia at different times.

It had also entered the lucrative market for lactoferrin, a “nutraceutical” substance used as an ingredient in infant formula and other products.

In a case of history repeating, the Beston Global Food Company was established in 2015 to salvage the two dairy factories after the collapse of their previous operator, United Dairy Power.

• More information for employees: asic.gov.au.
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