Beston Global to cease operations after failing to secure buyer

AUSTRALIA – Australia-based dairy company Beston Global Food Co. is set to cease operations after failing to secure a buyer, according to an announcement by its administrator, KPMG.

In a statement, KPMG confirmed that the South Australian business will be wound down, impacting 159 workers and 22 dairy farmers.

KPMG noted that several potential buyers had shown interest in acquiring Beston. However, “ultimately, the sales process has failed to secure a buyer in the time frame required given the trading losses being incurred.”

The advisory firm emphasized that significant weekly trading losses made it unsustainable to continue operations beyond 30 November 2024. As a result, administrators have begun an orderly sale of the company’s assets.

Beston Global had faced financial challenges for several years. The company entered administration in September after a potential deal with Japan’s Megmilk Snow Brand Co. fell through.

This non-binding agreement was intended to save Beston’s cheese and lactoferrin production business at its Jervois facility. However, the proposed transaction was terminated due to disagreements on terms, according to KPMG.

The administrators explained that milk production at Beston Pure Dairies, a wholly-owned subsidiary, will cease from 6 December. KPMG assured stakeholders that operations will continue as usual until the current production cycle concludes within the next two weeks.

A second meeting of creditors is scheduled for late January or early February to determine whether the company should enter liquidation or consider other arrangements.

KPMG indicated that a detailed report on the company’s financial status would be presented to creditors as part of the standard administration process.

Factors contributing to Beston’s financial decline were outlined in a previous statement to the Australian Securities Exchange.

According to Beston, rising debt, increasing interest rates, and narrow profit margins played significant roles.

Additionally, the company cited high energy costs, competition from low-cost dairy imports from New Zealand, Europe, and the United States, and regulatory challenges stemming from dairy code legislation introduced in 2019.

Former Group CEO Fabrizio Jorge highlighted that the failed Megmilk transaction could have preserved jobs at the Jervois facility and increased milk demand over time.

He explained that negotiations collapsed on 20 September after parties could not agree on acceptable terms.

Local media reports confirm that Beston’s infrastructure at its Jervois and Murray Bridge plants will be auctioned off.