Bega Australia has announced plans to phase out the Peanut Company of Australia following a thorough review that revealed annual losses of up to $10 million. The decision will affect approximately 150 employees and 90 local peanut growers. Bega intends to gradually shut down the processing operations at facilities in Kingaroy and Tolga, Queensland, within the next 18 months.
Pete Findlay, the Chief Executive Officer of Bega Group, acknowledged the significant impact this closure would have on staff and growers and committed to providing support throughout the transition. Employees will be offered redundancies, support services, and training for redeployment, with some potentially remaining in their roles until the closure is complete. The support services extended to staff will also be available for affected growers.
The decision to close the Peanut Company comes after a strategic review lasting over a year, prompted by persistent financial difficulties and challenges faced by the industry. The review confirmed that the company was incurring operating losses ranging from $5 million to $10 million each year. Bega had sought to find a local buyer to take over the business but was unsuccessful in this endeavour.
Findlay stated, “We announced the strategic review over 12 months ago, and we have explored several options to sell the business.” Unfortunately, the inability to secure a sustainable buyer has led to the current decision. Bega initially acquired the Peanut Company in 2017, at which time it was already under financial duress.
Over the years, the peanut industry in Australia has encountered various challenges, including heightened competition from imported peanuts, better profitability for growers from alternate crops, rising operational costs, and a decline in production. Despite Bega’s attempts to modernise and invest in the business, including significant upgrades and initiatives to support growers, it was unable to establish a viable business model.
Looking ahead, Bega plans to continue operating its other facilities in Crestmead and Malanda and maintain its distribution network throughout Queensland, affecting around 300 workers overall. The impending closure marks a challenging phase for those involved in the peanut sector, highlighting the ongoing struggles within the industry.