Tough decisions on closures to help Bega’s bottom line
The difficult decision by one of Australia’s largest dairy companies to close a long-running cheese factory and a peanut factory will pay off in the long term, executives say.
Bega Cheese chief executive Barry Irvin said the closure of the Strathmerton dairy in northern Victoria and the Peanut Company of Australia in Queensland would create a step change in earnings by 2026/27.
“We have created a more consolidated and efficient footprint that allows us to make key decisions around automation and capital allocation,” Mr Irvin told the company’s annual general meeting on Monday.
The Strathmerton processing and packaging facility, built by Kraft Foods in 1950, is being closed in mid-2026 and its operations are being consolidated into Bega’s existing facility in Bega, NSW, at a cost of 300 jobs.
The peanut processing business in Kingaroy and Tolga will close next year with the loss of another 150 jobs.
“Although we are reducing our workforce by approximately 450 roles, we are also increasing our business capacity, reflecting the productivity gains and sharper capital focus these changes enable,” Mr Irvin said.
He said consolidating the operations of the Strathmerton site into Bega’s Ridge Street site was expected to deliver a $30 million earnings boost in 2026/27, while closing the peanut business would reduce cost pressure by $5 million to $10 million annually.
Mr Irvin said the company was on track to surpass its earnings target of $250 million by 2027/28 and should generate revenue of between $215 million and $220 million this financial year, describing it as further evidence of Bega’s strategic momentum.
Mr Irvin said Bega was excited about the launch of its high-protein, “better for you” products in milk-based drinks and yoghurt, which align with growing consumer demand for health-focused dairy products.
He said Dare Protein, launched in 2024/25, is now Australia’s No.1 protein iced coffee and Bega is “reigniting innovation in peanut butter” with the launch of its new whipped peanut butter product.
He said Bega will unveil more innovations for the catering segment of the peanut butter market in the coming months.
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