Australia’s Bega Group has announced the closure of its peanut processing division, the Peanut Company of Australia (PCA). This decision will lead to a gradual shutdown of PCA’s facilities located in Kingaroy and Tolga, Queensland, over the next 18 months.
The Kingaroy site was acquired in 2017 when Bega Cheese purchased PCA. In 2022, Bega Cheese rebranded itself to Bega Group, reflecting its diverse portfolio that includes Bega cheese, peanut butter, and Vegemite spreads.
In a statement issued on July 9, Bega Group revealed that PCA had faced ongoing financial challenges for several years prior to its acquisition, reporting annual losses between A$5 million and A$10 million (approximately $3.27 million to $6.54 million). Despite ongoing investments, Bega Group has been unable to create a sustainable business model for PCA.
“Continued financial losses and industry challenges led to the need for the review and ultimately the conclusion that the business would be better served by a change to more local and focused ownership or, in the absence of that being achieved, unfortunately a closure,” the statement noted.
In June 2024, Bega Group initiated a strategic review of its peanut processing assets. CEO Pete Findlay stated, “We announced the strategic review over 12 months ago and we have 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.” This decision could jeopardize approximately 150 jobs.
Findlay emphasized the company’s awareness of the decision’s impact, committing to support growers and the 150 employees at Kingaroy and Tolga facilities through this transition. A company spokesperson clarified that the closure affects only PCA’s “raw” peanut processing operations, while peanut butter production will continue at Port Melbourne.
PCA, which generates annual sales around A$19 million, has additional facilities in Gayndah and Inverlaw. The Gayndah facility, identified as an overflow site, was sold separately before this announcement, while the future of the Inverlaw site remains under consideration.
“We are taking this transition very seriously and will consult with local community groups throughout this process,” the spokesperson added.
Earlier this year, the company also declared the closure of its cheese processing and packaging facility in Strathmerton, Victoria, and in February 2023, announced the relocation of its milk manufacturing operations from Canberra to Penrith, New South Wales.
For the first half of its 2025 financial year, Bega Group reported a 3% increase in revenue, reaching A$1.78 billion for the period ending December 29, 2024. Notably, EBITDA rose by 27% to A$109.3 million, with earnings per share (EPS) growing 14% year-on-year to 9.9 cents.
In summary, Bega Group’s decision underscores significant challenges within the food and beverage industry, particularly concerning sustainability in the peanut processing sector. As consumers increasingly seek reliable food and drink products, companies must navigate evolving consumer trends and market demands while addressing operational viability.