Bega Cheese to close QLD peanut facilities

Bega Cheese is closing its Kingaroy and Tolga peanut processing operations in QLD after failing to find a buyer for the failing business.

The planned shutdown will cause the loss of 150 jobs across the two facilities.

The peanut processing business has been incurring losses of between $5 and $10 million per annum, and Bega said following shutdown these losses will immediately cease. However, it does expect a one-off cash shutdown cost of between $5 to $10 million related to redundancies.

Bega Group CEO Peter Findlay said the decision was a hard one for the business, which Bega acquired in 2017.

“We announced the strategic review over 12 months ago and we have pursued several options to sell the business,” Findlay said.

“Unfortunately, we’ve been unable to secure a buyer that could sustain a long-term future for employees and growers.”

He explained that the business had been under financial pressures prior to the acquisition, and even investments to upgrade the sites and initiatives supporting local growers had been unable to create a more sustainable business model.

Bega blamed this on increased imports, better returns for other crops, high input costs, and overall declining production.

Despite the Kingaroy and Tolga shutdown, Bega will retain its two processing facilities in Crestmead and Malanda, as well as its broader distribution network.

Earlier this year, Bega announced it would close its Strathmerton cheese factory in Victoria, slashing about 300 jobs, and in 2023, closed its historic Vegemite factory in Port Melbourne.

Picture: credit PiccoloNamek (CC BY-SA 3.0)