Onerous overheads and retail pricing are hitting dairy processors hard, with the ADPF calling on Canberra to “urgently” engage with the industry.
Australia’s dairy factories are urging Canberra to “develop a specific road map” after Beston Global Foods became the latest processor to fall into administration.
More than 150 workers at the Beston’s Jervois and Murray Bridge sites will be affected by the move, after a buyout by Japanese conglomerate Megmilk Snow Brand fell through.
Australian Dairy Products Federation chief executive Janine Waller said a range of factors contributed to Beston being placed into voluntary administration.
She noted Beston were the 13th dairy processing factory closure in the past 24 months.
“The difficulties facing Beston, like many others in the sector, highlight the tough domestic trading environment that Australian dairy processors are grappling with,” Ms Waller said.
“Persistent retail price pressures, slow volume growth, skyrocketing overheads and input costs, coupled with regulatory constraints and import competition, have placed immense strain on the industry.
“These challenges are testing even the most resilient processing businesses.”
Beston is the latest processor to enter some form of administration or closure risk in the past two years with King Island Dairy, Sara Lee and Country Valley Milk all high profile casualties of the rising cost of doing business.
“Now, more than ever, we call on the federal government to urgently engage with our industry,” Ms Waller said.
“It is time to action the recommendations from the Inquiry into Food Security in Australia and develop a specific road map to reinvigorate the Australian dairy industry.
“We need collaborative efforts to create a more sustainable and competitive future for the Australian dairy industry, ensuring we avoid further closures and safeguard our long-term viability.”
Federal Agriculture Minister Julie Collins said: “I am looking forward to meeting with the Australian Dairy Products Federation.
“Our government will continue delivering for Australia’s agriculture industry and a critical part of that is listening to farmers and industry stakeholders.”
South Australian Dairyfarmers Association president Robert Brokenshire said his organisation met with 30 farmers impacted by the Beston decision this week.
“We’ve had productive talks with the administrators KPMG. Beston has solid fundamentals as a business and with the right buyer, it can prosper,” he said.
Mr Brokenshire echoed ADPF’s call for federal government engagement.
“There’s several areas where the Agriculture Minister can work to get dairy farming and manufacturing on an even keel,” he said.
“Energy costs for one are eroding profitability along the supply chain. The dumping of dairy produce by New Zealand and the United States is another issue really hurting both factories and farmers.”
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