‘Tough Day’: After 100 Years, Australia’s Largest Peanut Processor to Shut Down

Around 150 people will lose their jobs when the operation closes.

Peanuts are often referred to as the "fruit of longevity," as they not only protect the heart, nourish the blood, and support spleen health but also enhance cognitive function, promote growth, and slow down the aging process. MaKo-studio/Shutterstock

Despite Australians eating around 50,000 tonnes of peanuts each year, that hasn’t been enough to ensure the country’s largest processor of the foodstuff will survive.

The corporate owners of the century-old business have decided to scale down operations over the next 18 months before shutting its doors forever.

Bega Group, which bought the former Peanut Marketing Board for $11.9 million in 2017, says the around 150 employees at the Peanut Company of Australia’s Kingaroy and Tolga facilities in Queensland will be offered redundancies, support services, and other opportunities where possible.

The business dates back to 1924.

The business had undergone a 12-month review, but could not find a buyer and was making ongoing annual operating losses of $5 to 10 million, the company said.

Despite significant upgrades to site safety and initiatives aimed at helping local growers boost production, Bega Group wasn’t able to establish a sustainable business model.

Its challenges included competition from imports, stronger returns for growers from other crops, high input costs, and declining production, the company said in a statement.

“We understand the impact this decision will have,” Bega Group CEO Pete Findlay said.

Some employees would be able to stay in their roles until the complete shutdown in 18 months, he said.

No Buyer Found

The decision to close the processing operation follows a 12-month strategic review, during which Bega pursued several options to sell the business.

“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,” Findlay said.

“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,” Findlay said.

Peanut growers were told in August that the company could make no commitments beyond the current season’s crop, he said.

The Peanut Company of Australia’s shutdown will leave family-owned Crumptons as the nation’s only major processor and supplier. The Kingaroy-based business has been contacted for comment on the announcement.

Another Queensland-based peanut processor, Clifton Farming, closed in 2020 after the owners decided to retire.

‘Tough Day for Queensland Agriculture’: MP

The state MP who represents the area, Deb Frecklington, said the entire community would be affected by the decision.

“Bega is a highly profitable multinational company, and this decision will devastate the local community, who have been loyal to the brand for many years.”

National Leader David Littleproud said it was a “tough day for Queensland agriculture and Bega’s employees and contractors.

“PCA has been processing 19,000 tonnes of Australian-grown peanuts every year in Queensland, helping not just employees but regional towns.

According to the Grains Research Development Corporation (GRDC) there are about 120 manufacturers in Australia using peanuts for snack-food, confectionery, or peanut butter. Peanut Company of Australia information says there are over 250 growers in Australia.

AAP contributed to this story.