Administrator KPMG tried to sell the business as an ongoing concern, but instead, will auction off infrastructure from the Jervois and Murray Bridge sites.
South Australian Dairyfarmers' Association president Rob Brokenshire said he was extremely disappointed in the result.
“I believe we were close to pulling a walk-in-walk-out package together as a solution to move forward, but that’s now gone,” Rob said.
He said SADA was now focusing on supporting the farmers.
“I am pleased all impacted farmers have now found new processors to pick up their milk and even though it is going to take some time to recover, we are hopeful it won’t push too many out of the industry,” Rob said.
He said SADA was now working alongside the South Australian government to put together a proposal to help farmers in the short term.
“Every single dairy farmer is feeling for those impacted, along with all the factory workers who have lost their jobs,” he said.
“While we are glad those workers have been guaranteed their wages and holiday payments, there is a definite weakness in the system when farmers are not secured and not entitled to receive any of the payments they are owed.”
Rob said the closure had come on the back of a particularly tough time for the South Australian dairy industry after farmers experienced one of the worst autumns in living memory.
“Our farmers are resilient and our industry is resilient, and I believe there is a strong future, I just hope these farmers can make it through,” Rob said.
“We will continue to work with all parts of the industry as part of the South Australian Dairy Industry Action Plan 2024-29 and we will find ways to step away from these events and become stronger and better into the future.”
Mount Gambier dairy farmers John and Karen Hunt, and their son Daniel and wife Sam, are one of the 40-odd suppliers impacted by the demise.
They have been left $700,000 out of pocket.
John said Bestons had basically used the unpaid sale of their milk, along with other impacted farmers, to draw down debt for its own creditors.
“The CEO sat around our table, looked us in the eye, and continually assured us we would get paid — it’s the lies and deceit that has been so hard to take,” John said.
John said the non-payment of the milk cheque had effectively cost his business $1.4 million because now he must borrow money to repay his own creditors.
John said more was needed to be done to protect farmers to stop this from happening in the future.
A second meeting of creditors is expected to be convened in late January or early February 2025, which will decide if the company is to be placed into liquidation or whether a Deed of Company Arrangement can be accepted should one be proposed.
Bestons was well-known for producing high-quality, value-added products from its Jervois facility including cream cheese, hard cheese, whey and lactoferrin — a high value dairy protein used in diet supplements.
It recently won several gold medals at the dairy gala awards.
In a statement, Beston chief executive Fabrizio Jorge said while the lactoferrin and cream cheese business had earned strong profits, the cheese and whey powder business had incurred losses due to on-going cost and price pressures.
Milk production at the factory ended December 6.
