Beston Global Food Company goes into administration

Beston Global Food Company advised the Australian Stock Exchange on 20 September 2024 of the appointment of voluntary administrator KPMG. This follows what the company describes as a ‘perfect storm of adverse events’, including debt accumulated after the COVID lockdowns, high operating costs and uncompetitive milk prices.

The board and management of Beston have been working through a plan to address these challenges, including by making a number of operational enhancements and by divesting Beston’s meat processing business (which was completed in July 2024).

Beston has received several non-binding indicative offers in recent months, around both debt refinancing and equity solutions relating to Beston’s core business of dairy and dairy nutrition.

Beston’s Lactoferrin and Cream Cheese business (which accounts for around 20% of sales) has earned strong profits and the company recently received an offer from Megmilk Snow Brands Co in Japan to acquire its cheese and lactoferrin production facility at Jervois, South Australia. However, Megmilk advised on 20 September 2024 that it will not be proceeding with the binding offer submitted on 6 September 2024.

The Chief Executive Officer of Beston, Fabrizio Jorge, said he deeply regrets that the Megmilk offer could not be progressed through to completion.

“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,” Jorge said.

“It would have represented a win for the workers, a win for our loyal dairy farmers and ultimately would have been a win for the whole of South Australia, as the significance of the Jervois plant in producing premium-quality, health-enhancing products from dairy have become increasingly recognised around the world via the global marketing and distribution networks of Megmilk Snow Brands.”

Beston’s cheese products (mainly mozzarella and cream cheese) have been sold to more than 30 major companies in Australia and overseas (including Thailand, Philippines, Vietnam, China and Korea). 

KPMG has now assumed control of Beston’s business and assets, with the current intention to continue to trade the Group while an assessment of trading is undertaken and options for its sale and/or recapitalisation are explored.

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