Ernest Hillier falls into administration, blames rising ingredient and shipping costs

One of Australia’s oldest chocolate makers, Ernest Hillier, has fallen into administration, blaming rising ingredient and shipping costs.

A staff member pictured at Ernest Hillier’s Coburg factory in 2009.

One of Australia’s oldest chocolate brands, Ernest Hillier, has fallen into administration.

It’s the second time in eight years that administrators have been appointed to take control of the brand, whose history dates back more than 100 years.

Rising raw materials and shipping costs have been blamed for the company’s latest demise, which has left administrators searching for a white knight to save the company from liquidation.

WLP Restructuring's Alan Walker and Glenn Livingstone have been appointed voluntary administrators, and are seeking expressions of interest from investors interested in recapitalising or acquiring the business and its assets.

Mr Walker said manufacturing at the company’s Coburg, Victoria facility had been shut down as negotiations with potential investors continues, and 20 employees had been stood down.

“It’s unfortunate that such a storied chocolate manufacturer has encountered distress amid rising operating costs, but we are working with all stakeholders to do everything possible to save this iconic brand,” he said.

“We are working closely with all affected parties as we move with urgency to understand the business’s affairs and find a suitable buyer or investor. While this process is underway, we have had to make the unfortunate decision to cease manufacturing activity and stand down employees at this stage.

“However, this dedicated workforce is available and keen to restart production.”

The company was established by English migrant Ernest Hillier in Sydney’s Pitt St in 1914 and is believed to have been Australia’s first chocolate maker.

It has supplied major supermarket chains, including Woolworths, Coles and Aldi, with a distribution network extending across Australia and New Zealand.

Mr Walker said the Coburg facility was also used to produce white-label chocolates for “some of the world’s largest confectionery providers”.

“The company operates a significant manufacturing facility in Coburg, and the Ernest Hillier and Newman’s brands have featured on the shelves of Australia’s supermarkets for many years,” he said.

“We expect these supply agreements, alongside its relationships with large multinational food and beverage providers, may appeal to potential suitors.”

British private equity firm Re:Capital - the investment arm of restructuring company Hilco -paid $11m for the Ernest Hillier brand and business in 2014, before administrators took over control less than a year later.

The company was revived at the time by current owner Chocolate & Confectionery Company Pty Ltd, which company records show is backed by Hilco and a group of other investors including directors Denzil Tong and Darrell Houston.

The first meeting of creditors will be held on June 30.