Coomboona dairy farm sale ends Harvey Norman’s milk run

Australian Fresh Milk Holdings has bought the Coomboona dairy farm, ending Harvey Norman’s association with the dairy sector.

Australian Fresh Milk Holdings has completed the purchase of the Coomboona dairy farm, ending Harvey Norman’s association with the dairy sector.

ASX-listed Freedom Foods yesterday told the market Australian Fresh Milk Holdings, in which it owns a 10 per cent stake, had bought the operation in Northern Victoria.

Freedom Foods contributed $4.6 million to the purchase in accordance with its stake.

Harvey Norman took an impairment loss of $28.78m on AFMH’s debts in June last year after the venture, which was initiated by Gerry Harvey, went into receivership in March.

In September, Mr Harvey struck a deal with creditors in Coomboona that meant the company did not fall into liquidation.

Yesterday, a Freedom Foods statement said: “The Coomboona Dairy operation will expand AFMH’s production platform in a renowned dairy farming region, providing the opportunity to leverage its integrated approach to deliver sustainable production of high-quality milk, supporting a range of value added product opportunities.

“With the acquisition of the Coomboona Dairy operation, AFMH will be the largest dairy producer in Australia with current operations forecasting to produce more than 150 million litres in 2019.”

AFMH already runs a dairy farming operation, Moxey Farms, in the Lachlan Valley, NSW, 340km west of Sydney.

It came as Freedom Foods also announced commencement of an upgrade to its Shepparton site, which will contribute materially to earnings from the 2020 fiscal year.

The upgrade, once complete, will enable it to produce 500 million litres of UHT milk a year, up from a current capacity of 150 million.

Shares in Freedom Foods closed steady at $5.06.

AAP