Bega Group to acquire Tasmanian milk brands for $11 million

Bega Group is set to acquire Tasmanian dairy brands Betta Milk and Meander Valley from TasFoods Limited in an $11 million deal.  

The acquisition, which is subject to approval by the ACCC, also includes a perpetual, royalty-free licence to use the Pyengana Dairy brand for milk and cream products in Australia.

The deal will see the Burnie milk plant, equipment, and staff transferred to Bega; however, TasFoods will retain the land and buildings on the site and lease them back to Bega.

Scott Hadley, CEO of TasFoods, said the sale of the businesses and the licensing of Pyengana represent an important strategic step towards simplifying TasFoods and strengthening the company’s balance sheet.

“Since the announcement of the new Strategic Focus in March 2022, TasFoods’ Board and senior management team have continued to assess the divisions and asset base of the company through the lens of where our expertise and core capabilities can add value.”

TasFoods acquired Betta Milk in 2019 for $11.5 million and Meander Valley Dairy in 2015 for $2.1 million. However, the company stated that the sale of the two brands would leave TasFoods debt-free and fund future growth.

“The transaction allows TasFoods to sharpen its focus on delivering organic growth across Nichols Poultry and Pyengana Cheese, while continuing to identify and evaluate strategic and financially compelling opportunities in adjacent, high-growth food and beverage sectors to create sustainable value for our shareholders.

“We are confident that the Betta Milk and Meander Valley Dairy business, its customers, and its employees will continue to thrive under the custodianship of an equally proud, Australian-owned group in Bega,” said Hadley.

Pete Findlay, CEO of Bega Group, said they are delighted to be adding the Tasmanian brands to their portfolio.

“Betta Milk is a fantastic regional brand that has been a household name in Tasmania for over 65 years, and acquiring these brands supports our ambitions to become a great Australian food company.

The acquisition comes on the back of Bega Group’s recent full-year 2023 results, in which it posted a loss after tax of $229.9 million, following a profit of $24.2 million in the previous year.

The company, which has the number one share of milk-based beverages in the market with 52 per cent, said that FY2023 presented some of the most complex, diverse, and rapidly changing challenges the company has ever experienced.

“While the operational impacts of the COVID-19 pandemic dissipated, other challenges emerged. Rapidly rising commodity prices and robust competition for milk supply resulted in Australian farmgate milk prices significantly increasing in FY2023. Other input cost inflation and escalating fuel and energy costs all continued to impact the business.”

To stay up to date on the latest industry headlines, sign up to the C&I e-newsletter.

Leave a Comment

Your email address will not be published. Required fields are marked *

Scroll to Top