Beston Global Food Company Limited and its wholly owned subsidiary, Beston Pure Dairies Pty Ltd, (Beston) entered voluntary administration on Friday 20 September 2024.
At the time, Beston was the fourth largest processor of milk in South Australia, having previously reduced its contracted milk volumes in mid–2024.
The administrators (KPMG) advised they were in effective control of the assets, trading, and the day-to-day operations of the companies, with the priority being to notify shareholders of the appointment and undertake an immediate assessment of the business and its operations.
Options for its sale and/or recapitalisation were proposed to be explored. We understand several inspections and due diligence reviews were undertaken on the properties and financial records.
An initial creditors meeting was held on 2 October, with a further creditors meeting scheduled within 25 days. The secured creditor exercised their right to cease operations in early December.
On 26 November 2024, KPMG announced that Beston would undergo an orderly wind down with milk production operations ceasing on 6 December 2024.
The winding down meant that 41 dairy farmers who were owed more than $10M for milk supplied pre-administration, would not be paid for their milk.
The Beston companies collected their milk from farmers mainly in the central and south-eastern regions of South Australia. Approximately 63M litres of contracted milk supplied to the companies was successfully re-directed to alternative dairy milk processors in South Australia and Victoria, ensuring minimal wastage.
During the period of business disruption, Dairysafe provided services to the Beston processing businesses to ensure food safety plans were being adhered to and assist with procedures. The outcome was the successful minimisation of food safety hazards in a period of redundancies of key staff and process uncertainties.
“Our intention for minimising any unforeseen risks to customers and consumers was precautionary. The standard of compliance management shown by Beston staff was commendable in the circumstances prevailing,” said Dairysafe CEO Alistair McFarlane.
In this period, discussions were held with the South Australian Dairyfarmers Association (SADA) regarding their role in supporting impacted dairy farm suppliers. Discussions were held with various individual dairy farmers affected to ensure on-farm milk quality and health were not impacted.
“It is to the credit of SADA and all individual farmers that a highly professional approach was maintained in this period of uncertainty, and no serious matters or wastage occurred on farm,” Alistair said.
An example of a milk supply contract transitioning from Beston to another supplier is provided in Peter Telford’s profile. Read it here.