Australia’s largest organic dairy company collapses under a $15million mountain of debt in another blow for struggling farmers
- Organic Dairy Farmers of Australia was placed into voluntary administration
- The company is owned by family dairy farms across Victoria and Tasmania
- Its collapse comes as drought-affected grain farmers face an uncertain future
- China has imposed 80 per cent tariff on Australian barley exports from May 19
- Barley is worth $600 million a year to Australia and up to 66% is sold to China
Australian farmers have been dealt another blow with the country’s largest organic dairy company being forced to fold under a mountain of debt.
The Organic Dairy Farmers of Australia, based in Geelong, was placed into voluntary administration last week, owing about $15million to creditors.
The company, which is owned by family-run dairy farms across Victoria and north-west Tasmania, produces the True Organic brand of butter and supplies milk for FiveAM Yoghurt, Lemnos, and Pure Organic Milk. Its focus had been on growing its exports to China.
The Organic Dairy Farmers of Australia, based in Geelong, was placed into voluntary administration last week, owing about $15million to creditors
The company, which is owned by family-run dairy farms across Victoria and north-west Tasmania, produces the True Organic brand of butter and supplies milk for FiveAM Yoghurt, Lemnos, and Pure Organic Milk
But the company directors chose to place it into administration after struggling amid with a ‘contracting Chinese market’, delayed sales, and now the impact of COVID-19.
The looming demise comes after it was given more than $2.5 million in state and federal government grants.
The company owes National Australia Bank $8 million and unsecured creditors between $3.5 and $5 million, The Geelong Advertiser reported.
Creditors will decide the future of the company by June 26. The first meeting is scheduled for May 27.
The looming demise comes after it was given more than $2.5 million in state and federal government grants
Two farmers in the bushfire-ravaged town of Cobargo are seen in January (pictured), with businesses now hit by an 80 per cent export tarriff
A barley farmer is seen in central NSW (pictured) with the industry hit by drought and now by China’ crippling tariff
Australia’s export markets in 2019
1. China: $135 billion (33% of total Australian exports)
2. Japan: $36 billion (9%)
3. South Korea: $21 billion (5%)
4. United Kingdom: $16 billion (3.8%)
5. United States: $15 billion (3.7%)
The announcement comes just days after China slapped a crippling 80 per cent tariff on barely exports from Australian farmers.
Australia sends between half and two-thirds of all its barley to China, making the tariff decision a massive blow to the $600 million a year industry.
The extraordinary tariff, to remain in place for five years, is set to cripple Australia’s drought-affected grain farmers.
It is an apparent punishment for Scott Morrison’s push for a coronavirus inquiry.
The Australian prime minister in April demanded an independent probe into the deadly respiratory virus and the World Health Organisation’s handling of the crisis.
In response, Chinese state media and leaders warned of trade retribution that could wipe $135 billion from the Australian economy.
China claimed Australia was dumping barley and subsidising farmers, insisting the tariffs are nothing to do with coronavirus.
INDUSTRY HITS BACK AT CHINA FOLLOWING TARRIFFS
The chief executive of Grain Producers Australia, Andrew Weidermann, says farmers are not scared to cut ties with China.
He said while he hopes the two nations will come to a dually beneficial agreement, the industry will always find a way to survive.
‘We want to negotiate on this with China and continue to do business,’ he told The Australian.
‘But if they slam the door in our face, we have to consider not doing business in China.’