Australian cheese giant Bega Group buys homegrown Tasmanian dairy brands in historic $11m deal

An iconic homegrown brand has been snapped up as part of a historic multimillion-dollar acquisition deal.

An iconic homegrown Tasmanian milk brand is set to be scooped up by mainland dairy giant Bega Group in a historic multimillion-dollar acquisition deal.

Bega Group has entered into a sale agreement to acquire the businesses and specific assets of both Betta Milk and Meander Valley Dairy from TasFoods Limited for $11 million.

Tasmania's Betta Milk is renowned for poking fun at mainland Australia, now it’s moving across the Bass Strait.

The deal, announced to the ASX on Monday, also includes a “perpetual, royalty free licence” to use the esteemed Pyengana Dairy brand – another business in the TasFoods portfolio – for milk and cream products across Australia.

Although the sale hinges on the final approval of the Australian Competition and Consumer Commission (ACCC), if and when it does change hands, it will spell the end of an era for the homegrown brands – and the early retirement of the Betta Milk Protection Squad.

Betta Milk has built its 70-year-old reputation on protecting its goods from “mainlanders”, with its ads starring members of the Betta Milk Protection Squad stopping Aussies from smuggling the milk across the Bass Strait.

Meander Valley Dairy is not as protective of their products, but is renowned for its award-winning cream and butter.

Bega Group chief executive officer Pete Findlay said he was “delighted” to add the dairy brands to the company’s portfolio in a move that improves its “offering of great local brands for Tasmanians”.

“We recognise the quality in the Betta Milk, Meander Valley Dairy and Pyengana milk brands and we are delighted to add these Tasmanian brands to our portfolio,“ Mr Findlay said in a statement.

“Betta Milk is a fantastic regional brand that has been a household name in Tasmania for over 65 years and acquiring these brands supports our ambitions to become a great Australian food company.”

Bega Group is renowned for its cheese.

Meander Valley Dairy and Betta Milk are the latest brands for TasFoods to drop in a bid to become more profitable, the ABC reports.

TasFoods bought Meander Valley Dairy in 2015 for $2.1 million and Better Milk for $11.5 million in 2019 – well above than the combined price of the looming sale.

But TasFoods chief executive officer Scott Hadley said the sale was not “like-for-like” comparison, and insisted the company was getting more than it had paid for the milk brand.

“The company also sold some other assets over the last 12 months,” Mr Hadley told SkyNews.com.au.

“When you look at it as a total package, TasFoods has actually realised more for the business now than what it paid for it in 2019.”

The sale is the first time Betta Milk will be owned by a mainland company.

He said TasFoods would keep the land and the buildings associated with Betta Milk at its Burnie site, on the northwest coast of Tasmania, and would soon enter a lease agreement with Bega.

TasFoods also plans to retain the lease associated with Meander Valley Dairy in Launceston and enter a sublease agreement with Bega until the end of June 30, 2024 – when the contract ends, Sky News reports.

Mr Hadley said the sale is not only part of its strategy for “simplifying TasFoods and strengthening the company’s balance sheet”, but will leave it debt-free and ready to invest in its remaining poultry and cheese brands.

“I think it should be seen as a positive that a big dairy company like Bega value and are really passionate about brands like Betta and Meander Valley,” Mr Hadley continued.

“It‘s testament to the great work of all the staff and Tasmanians that we’ve got this great brand and I’m confident that Bega will be a great custodian of the brands in the future.”

Originally published as Australian cheese giant Bega Group buys homegrown Tasmanian dairy brands in historic $11m deal