Bega Cheese’s long awaited takeover of the Vegemite brand was finalised on Tuesday, after delays caused by last week’s global cyber attack.
“We’re delighted to be the company that has brought everyone’s favourite spread home to local ownership,” Bega Cheese executive chairman Barry Irvin said.
“But today is about more than a brand it’s about the people we are welcoming into our business, the world class manufacturing facilities we have acquired and ultimately the manufacturing industry that we are helping to ensure stays viable and sustainable in Australia.”
"Employees of the company here in Bega are excited about the growth of the business."Bega Cheese factory site manager Leon Garner
Bega Cheese’s $460million acquisition of food giant Mondeléz International’s Australian and New Zealand grocery and cheese business will now allow “Aussie now has the opportunity to own a piece of the iconic spread”, the company said.
Last week’s ransomware attack, linked to the so-called ‘Petya’ virus, shut down all of Mondeléz’s IT systems, reportedly affecting the Cadbury factory it runs in Hobart and delayed Friday’s scheduled deal by four days.
“The combination of Australia’s favorite food brand with Bega Cheese’s product portfolio creates a remarkable opportunity for the combined businesses,” Mr Irvin said.
The deal, first announced in January this year, sees Bega Cheese take over the branding of a string of Kraft products.
“The suite of category leading brands that form a key part of the deal is grounded in a strategic blue-print for success,” Mr Irvin said.
“While our focus will continue to be on local growth, we plan to capitalise on the extensive resources we have absorbed to support expansion into export markets in Asia.
“The acquisition is about diversifying our product portfolio, pursuing growth through marketing synergies and building a consumer goods infrastructure to support our expansion.”
The deal will see the Vegemite brand in Australian hands for the first time in 90 years and has secured another 200 Melbourne-based jobs as Bega Cheese looks to diversify and tap new markets.
After the deal was announced in January, Australian entrepreneur Dick Smith showed his support by buying up $250,000 worth of shares.
“You need to have wealth creation staying in Australia, it just makes you poorer otherwise,” the 72-year-old former Australian of the year said at the time.
The company’s share price has risen by over a dollar in the last month, sitting at $6.93 on Wednesday morning after two share issues to raise capital.
“There is a real opportunity to drive change and grow our local and iconic brands under the stewardship of Bega Cheese,” Bega Cheese Food Business’s marketing director Ben Hill said.
“We plan to capitalise on Bega’s export expertise as well as reinvigorating our marking strategies in Australia.
“It’s important that we continue to recognise that Australia is a young, diverse and multi-cultured country with 52 per cent of Sydneysiders and 36 per cent of the Melbourne population not born in Australia.
“The recent Census reveals that just over a quarter of our population are born overseas, this insight alone paves the way for new thinking in marketing Vegemite and our other brands.”
The company generated revenue of $1.2billion during the 2016 financial year, selling over 32million Bega branded products a year from its six manufacturing plants.
Employees excited by growth
It makes sense that Australia’s favorite sandwich ingredients come together under the same brand.
Bega Valley Mayor Cr Kristy McBain says the merger shows the region’s economic muscle.
“For what was a small company to grow to be ASX listed and then bring a major food icon back to Australian ownership, just goes to show that regional Australia continues to drive economic growth,” she said.
Cr Kristy McBain predicts this deal could be the first of more to bring big business to the area.
“From a Shire perspective, we think it would be quite easy to attract other business to move into an area like ours now.”
Leon Garner, site manager at the Bega Cheese factory, says the response has been positive from his workers.
“Employees of the company here in Bega are excited about the growth of the business,” he said.
“There’s also just that excitement of having such an iconic product join the Bega group.”
Mr Garner says the deal could lead to new possibilities in the future.
“It’s not just Vegemite, there are a range of products under that brand,” he said.
“There could even be activity in the grocery business of Vegemite, creating avenues for cheese and products that we already make, so the synergy will leverage for broader opportunities.”
Vegemite in school canteens
They give a Gonski and now its official – the NSW Government is also a ‘’pro-Vegemite government’’.
And Wollongong MP Paul Scully is a happy little Vegemite.
The Labor politician feared the popular spread’s days were numbered in our state’s primary school canteens, after the NSW government’s crackdown earlier this year on the food sold at canteens.
This prompted Mr Scully to ask Education Minister Rob Stokes if the Department of Education issued a directive to schools suggesting Vegemite should be used ‘sparingly’.
‘’While I am Education Minister, Vegemite sandwiches will continue to be on offer in New South Wales school canteens. The Government is a pro-Vegemite government,’’ answered Mr Stokes.
Mr Scully uses Vegemite ‘’sparingly’’ but is happy that won’t be the case for our kids.
‘’It would be an un-Australian act by a government to ban Vegemite from school canteens and I’m pleased that it is still going to be on offer,’’ he said.
‘’I hope that is the case not only while Minister Stokes is education minister, but while future ministers for education are there as well.
‘’There was speculation it would be off the menu. Kids everywhere are celebrating that won’t be the case.’’