Mount Gambier farmer John Hunt on the Beston dairy fall out

Former Beston supplier John Hunt says a processor demise similar to the South Australian factory collapse can be prevented. Here’s how.

Business regulators need to ensure dairy farmers aren’t left carrying the financial can following a processor collapse, an ex-farming loby leader says.

John Hunt, a former South Australian Dairyfarmers Association president, is speaking out over the collapse of Beston Global Food Company, after his family was left $700,000 out-of-pocket.

Mr Hunt also experienced the 2017 demise of Murray Goulburn first-hand and said there were similarities over a lack of corporate accountability and how farmers are ultimately left high and dry.

“Dairy farmers supply the raw product that ensures the employment of the rest of the processing chain,” the Mount Gambier region farmer said.

“Yet when there’s a collapse like Beston, we are the last in line for payment.

“Yes, we’re $700,000 out-of-pocket but we’re not the worst off from all of this drama. I know another farmer who lost $900,000, another in Victoria was $1.1 million out-of-pocket.

“It’s not just the $700,000 — we still have creditors to pay, so ultimately it will cost $1.4 million for us and the same applies for those other farmers — it’s a doubling in expense.

“Beston has used the sale of our product to draw down debt for their own creditors and left us unpaid for two months milk supply. Management assured us and other farmers we would be paid, assured us multiple times.”

Mount Gambier region dairy farmer John Hunt. Picture: Tom Huntley

In November 2024, Beston’s administrator KPMG confirmed it was unable to find a buyer, two months after the company went into voluntary administration on September 20.

KPMG tried to sell the business as an ongoing concern and several companies expressed interest, but the Jervois and Murray Bridge will be auctioned off sometime this year.

As a result of the KPMG move, dairy farmers were not paid for the milk supplied during the limbo period prior tho it being dissolved.

Mr Hunt said the Australian Securities and Investments Commission needed to closely examine the case to prevent it being repeated elsewhere.

“We need to make sure processors are held accountable so we don’t see a repeat of the Beston episode. There’s a window for future processor trading while insolvent to hide behind safe harbour clauses. ASIC needs to look at this case and ensure history doesn’t repeat, because the dairy industry is in a precarious state and there’s every possibility this issue will reoccur.

“This is a role for ASIC, rather than with the ACCC and the mandatory dairy code.”

SADA president Robert Brokenshire, who succeeded Mr Hunt in the top dairy lobbying role, said regulatory lessons needed to be learned from the Beston saga.

“If we want a sustainable dairy industry, we have to get the balance right between farmer and processor. The Beston example is that the farmer wears all the risk.”