Supermarket price wars, labour costs close Dairy Bell ice cream

Small Melbourne-based ice cream maker Dairy Bell Ice Cream will close its Melbourne and Sydney factories on 27 February after 44 years of manufacturing ice cream in Australia and selling into independents such as convenience and grocery stores.

The manufacturer of mainly take home ice cream cited the supermarket “ice cream wars” as a major factor in the closure along with high weekend penalty rates at its retail outlets – five in Melbourne, one in Adelaide and one in Sydney. And the loss of margin reduced its capacity to recover costs over the last four years.

“We tried our own shops with a terrific customer response however, the weekend trade (our best time) made losses due to the high weekend cost of labour in the stores,” Dairy Bell ice Cream said in a statement.

“Indications for the future are of continuing ingredient and labour rises making plant and machinery replacement and profit budgeting impossible. We do not wish to compromise our assets and therefore have decided that the timing is right and the opportunity is there for us to now develop our inner city real estate sites in Melbourne and Sydney.”

Owner and co-founder (in 1970) of Dairy Bell Ice Cream, Andre Razums, said that the company is solvent and all creditors will be paid in full and it is the company’s decision to close.

“We can’t sell $3 ice cream when the hand that scoops that bit of ice cream is getting paid $30 an hour,” he said. “You must know when to hold it and know when to fold it.”

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