Page 6 - Food&Drink Nov-Dec 2020

NEWS
Top 5 clicks of 2020
The year was not short of news, these five had the most clicks of all.
1INDUSTRY BRIEFING ON COVID-19
Food & Drink Business
posted a number of industry briefings as COVID-19 unfolded.
The first, on 12 February, got the
most hits as everyone grew increasingly
nervous about the speed with which it was spreading
around the world. At that stage 40,000 people were infected, 1000 had died and there were only 319 cases reported outside of China. At the time industry analysts and experts were saying it was too early to predict how the pandemic would play out in Australia. The great toilet paper hoarding of 2020 was not even a glint in their collective eye. (At press time more than 58 million cases and more than 1.4 million deaths have been recorded worldwide.)
2WOOLWORTHS $552M BID FOR PFD In August, Woolworths Group announced its intention to buy a 65 per cent stake in foodservice supplier PFD Food Services for $552 million, as well as 100 per cent of PFD’s freehold properties, which included
26 distribution centres. The deal was divided into $302 million for the equity interest and $249 million for the properties, which Woolworths would then lease back to PFD.
CEO Brad Banducci said the deal was a “logical adjacency” for the group and would further support the business becoming a food and everyday needs ecosystem. In September, the Australian Competition & Consumer Commission began an investigation into the proposal’s potential impact
on competition.
uncovered, $4 million of bad debt blew out to more than $10 million and the board claimed it only found out about it all as the cards started to fall. Since then the majority shareholders, the Perich Family, have taken the helm and announced they will pour $100 million back into the company while also looking to match that figure from external investors. In October, US almond growers’ group Blue Diamond Growers launched legal action against the company seeking US$16 million for alleged licence breaches and fraud. Freedom Foods is countersuing. The company has been in a trading halt since 24 June.
been looking to bring more of its secondary cheese processing in-house for some time to gain “greater end-to-end control over a range of different cheese products and further strengthen our integrated supply chain”.
Freedom Foods Group had a very messy year.
PFD’s 26 distribution centres are part of Woolworths’ $552m bid.
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Freedom Foods Group started to feel like a weekly serial this year, with Food & Drink Business writing eight stories on the company between June and October. News broke in late June that CFO Campbell Nicholas had resigned, and CEO Rory Macleod taken leave pending a further announcement. What followed was grim. An expected inventory write-down of $21 million announced in May was now going to be in excess of $60 million, invoicing errors dating back more than five years were
MACHINERY
FREEDOM FOODS’
When COVID-19 made its presence known in Australia, its only medical mask manufacturer, Med-Con,
had to step up production dramatically. It contracted Echuca-based packaging machinery manufacturer Foodmach to assist in expanding its manufacturing capacity. Foodmach was contracted to build machines to make surgical face masks for Med-Con. Pre-coronavirus times, the mask manufacturer’s
plant in Lemnos,
Victoria was
making about
two million
masks per year,
supplying about five per cent
of the Australian market. But pandemic-driven demand meant it needed to increase production to 50 million masks per year. This was
one of the first stories of companies pivoting due to the pandemic. Foodmach with the masks, then all the distillers and breweries with hand sanitiser. What a year. ✷
WOES BEGIN
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ACQUISITION OF DAIRY COUNTRY
Fonterra is set to acquire Dairy Country for $19.23 million. The company currently holds a 23 per cent market share in the Australian retail cheese category with brands such as Perfect Italiano, Mainland and Bega. The acquisition from Retail Food Group, which is subject to regulatory approvals, will include the two Victorian packing and processing facilities, as well as related services, intellectual property and the trademark for the Dairy Country brand. The Australian retail cheese category is worth around $2.6 billion. Fonterra Australia managing director René Dedoncker said it had
FONTERRA’S
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FOODMACH PIVOTS
TO MASK MAKING
PROPOSED
6 | Food&Drink business | November-December 2020 | www.foodanddrinkbusiness.com.au