Tasmanian yoghurt manufacturer Tamar Valley Dairy is reported to have been offered a cash lifeline of up to $8 million by other Australian food companies.
The Australian reports Victorian dairy manufacturer Bulla Dairy Foods is keen to take an immediate equity stake in Tamar.
But Bulla chief executive Reg Weine would not confirm the reports to SmartCompany this morning.
“[Bulla] does not discuss its confidential dealings”, he said.
The cash injection would serve as a lifeline to the beleaguered yoghurt manufacturer, which has racked up substantial debts.
Tamar owner Archie Matteo confirmed to The Australian that his family company owed its creditors and suppliers several million dollars as part of a “short-term liquidity problem”.
He said Tamar was considering all recovery options, including selling equity in its quality yoghurt label to reduce debt.
Tamar has just finished building a new yoghurt factory and recently had a request for $5 million in funding to the Tasmanian government rejected.
Sydney accountants Lawler Partners are reported to be holding a meeting of creditors in Launceston today to ask Tamar’s creditors to give the yoghurt manufacturer up to four months of “breathing space” from its debts.
SmartCompany contacted Tamar and Lawler Partners for comment but did not receive a response prior to publication.
Naren Sivasailam, senior IBISWorld analyst, told SmartCompany the dairy business is already very highly concentrated with a “large amount” of foreign ownership.
“Consolidation is certainly happening in the dairy industry and the supermarkets have driven that as farmers margins are being eroded,” he says.
“But yoghurt is different from other dairy categories as there is a slightly higher level of brand loyalty, so it is not as threatened by the growth of private labels as it is in milk.”
Cara Waters is the editor of SmartCompany. Cara was previously a senior reporter at the Financial Times website FT Adviser in London and has also worked for The Sunday Times.
