Beston Global Foods sell meat division Provincial Food Group

Beston Global Foods used to be in the meat sector – but a financial rollercoaster ride has seen them refocus on dairy.

Beston Foods has sold its meat division to pay down debt, looking to shake up its dairy business as it works to stay afloat.

Shares in the South Australian dairy company have been suspended since the start of the financial year, with the company trying to find a solution to its debt pressures.

Last week, Beston management confirmed the sale of its meat division, Provincial Food Group to a Victorian-based consortium for $4 million, with the money to be paid to its major creditor NAB, which was owed $55m as at the end of March.

The company’s most recent quarterly for the March period had the company’s debt load at $69.1 million.

“With the completion of this divestment, Beston will continue to focus its resources and efforts on its dairy and dairy nutrition businesses, where the company has built world-class capabilities and capacity,” Beston management told the ASX.

“As previously advised, Beston has been working on several corporate actions to respond to the challenges of current market conditions and cost price pressures and provide the structural flexibility needed to address these ongoing industry challenges.”

Earlier this year, Beston chief executive Fabrizio Jorge said a flood of cheap dairy imports and an unexpected surge in milk production had left the company with “north of $20 million in stock” in February, which the company had to sell down to bring more cash back into the company.

Mr Jorge said Beston had struggled to compete on the domestic market with a flood of cheap US and New Zealand cheese and butter imports.

He said the company also locked in contracts last year with farmers on the assumption that the Bureau of Meteor­ology’s forecast of a drought-driven El Nino in 2023-24 would mean less milk coming through the factory door.