The sale of the Lion Dairy & Drinks business to ASX-listed food and dairy company, Bega Cheese, has been well received by the company’s largest supplier group, Dairy Farmers Milk Cooperative (DFMC).
DFMC today came out in full support of the deal, which is expected to be completed in early 2021.
“We are very pleased to hear that Bega has bought Lion Drinks & Dairy,” said DFMC Chairman and Gympie dairy farmer, Andrew Burnett.
“The iconic Dairy Farmers brand is now back in Australian ownership, jam-packed with local milk nationwide.
“With over 120 years of heritage, it is clear that Bega is ideally positioned to drive the Dairy & Drinks business into the future, and we look forward to continuing our long-term milk supply partnership.”
DFMC supplies about 200 million litres of quality milk every year to Lion Dairy & Drinks in a long-term partnership.
The cooperative has over 300 members from more than 200 farms in Queensland, New South Wales, Victoria and South Australia.
“Bega’s purchase of Lion Dairy & Drinks ensures our milk supply remains secure, and we can continue providing value and security to our dairy farmers,” said DFMC Executive Officer Mark Kebbell.
Earlier in the year, Mengniu Dairy and Lion Drinks & Dairy mutually agreed to cease sale proceedings after it became apparent that it would not receive approval from Treasury.
“The failed sale to Mengniu was a disappointing blow, but we are glad to see Australian-owned Bega step in, and that there are no further regulatory approvals required,” said Mark.
The deal will include Lion’s big-name brands including Dairy Farmers, Pura, Farmers Union, Berri and Daily Juice.
It is anticipated that the $560 million purchase will generate over $3 billion in annual revenue.
DFMC looks forward to commencing discussions with Bega about growing the supply of milk from their family dairy farmers’ base.