Bega to close another factory

About 150 employees at the Peanut Company of Australia's Kingaroy and Tolga facilities in Queensland will be offered redundancies, support services and other opportunities where possible, Bega Group said on Wednesday, July 9.

“We understand the impact this decision will have,” Bega Group chief executive Pete Findlay said.

Some employees would be able to stay in their roles until the peanut supplier closes completely in 18 months as part of a phased shutdown, he said.

Established in 1924 as the Peanut Marketing Board, the company had been under sustained financial pressure for several years prior to its $11.9 million acquisition by Bega Group in 2017, the company said.

Despite significant upgrades to site safety and initiatives aimed at helping local growers boost production, Bega Group wasn’t able to establish a sustainable business model.

Its challenges included competition from imports, stronger returns for growers from other crops, high input costs and declining production, Bega said.

The peanut company had been losing $5 million to $10 million a year.

The decision to close the company follows a 12-month strategic review, during which Bega pursued several options to sell the business.

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

Peanut growers were told in August that the company could make no commitments beyond the current season’s crop, he said.

Bega Group said it continues to have a strong presence in Queensland, retaining two processing facilities in Crestmead and Malanda, as well as its distribution network.

The Peanut Company of Australia’s shutdown will leave family-owned and Kingaroy-based Crumptons as the nation’s only major processor and supplier.

Bega Group announced in May it would close its cheese processing facility in Strathmerton, with the loss of 300 jobs.

– with AAP.