Megmilk Snow Brand seeks to acquire Beston Global Food

A Japanese dairy conglomerate is seeking to acquire a key South Australian milk processing site. Here’s what they already own.

Beston’s dairy processing site in South Australia may soon have a new owner with confirmation of a non-binding offer from a Japanese dairy conglomerate.

In a statement to the Australian Securities Exchange today, Beston management confirmed Megmilk Snow Brand had entered talks to buy Beston’s Jervois plant, near Tailem Bend, east of Adelaide.

Beston management said the sale offer for the cheese and lactoferrin production business contained a number of components, and was subject to a number of conditions such as bank and shareholder approval.

Megmilk Snow Brand already owns several Australian cheesemakers, including Udder Delights based in the Adelaide Hills, Unicorn Cheese in the Shoalhaven region as well as Nowra Farmhouse in NSW.

With origins in the Japanese farm lobby, Megmilk Snow Brand was previously known as the Nippon Milk Community Company until a 2009 rebranding.

A Beston employee works on the mozzarella production line at the Jervois plant in 2018. Photo: Walter Bulyga

In July, 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.

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.