Bega honey pot as Capilano deal confirmed, milk prices increase

Bega CEO Paul van Heerwaarden and Bega Cheese chair Barry Irvin outside the Koroit Bega office. Picture: Morgan Hancock
Bega CEO Paul van Heerwaarden and Bega Cheese chair Barry Irvin outside the Koroit Bega office. Picture: Morgan Hancock

Around the same time Bega Cheese launched into the sticky world of honey, it moved to increase the price it pays for milk solids. 

In welcome news for drought-troubled farmers, the price increased by 50cents to $7.20kg/MS for the 2018/19 financial year. 

The company’s executive chairman Barry Irvin made the announcement in a letter addressed to his suppliers in late August. 

“It has been a very challenging period in the Bega region for dairying, we are significantly impacted by the drought and cost increases from grain to energy and almost every other input has put great pressure on all dairy farmers,” he said. 

“The drought has brought increased pressure to all in the industry and now sees NSW market milk companies going further afield to procure milk.

“In recent days that pressure and competition has come to our region and while it is important to reflect the returns for the products we produce at Lagoon Street it is also important that our farmers receive a competitive price for their milk and we maintain milk supply in the Bega region to ensure the infrastructure that supports the industry in the region is maintained in the long term.”

Also, he said Bega’s supply premium would double to 50cents kg/MS and his company would extend a loan advance program available in Victoria to the Bega region.  

The news came just before the company announced it had become a substantial shareholder for Capilano Honey Limited on September 3. 

Bega Cheese bought 255,951 shares in the company for about $5.38million last week after reportedly becoming interested in diversifying into honey.

But it is a difficult period for Australia’s biggest listed honey company, as a joint investigation by Fairfax Media and ABC released this week found Capilano was facing accusations of selling fake honey. 

The investigation stated testing of Capilano’s Allowrie branded Mixed Blossom Honey, which sources honey from Australia and overseas and markets itself as 100 per cent honey, found it had been mixed with other substances in the majority of samples tested. 

Capilano rejected the claim, stating Allowrie contained only pure honey and criticised the type of test used in the investigation – called nuclear magnetic resolution – saying its results were inconsistent.