George Weston and Primo both keen on Hans acquisition

Posted by Daniel Palmer on 9th January 2009

George Weston Foods, the owner of Don KRC, and Primo Smallgoods have signalled their intentions to purchase Hans Smallgoods.

Hans went into voluntary administration in November, with the business operating as normal until an appropriate buyer is found by the administrators – KordaMentha.

“Hans is a great brand and has some world class facilities, so our first aim will be to offer the business to buyers with related interests so that some synergies may be achieved,” Mark Mentha, from KordaMentha, said in November.

George Weston Foods, which owns the Don, KR Castlemaine and Watsonia smallgoods brands, and Primo have both sought approval from the ACCC to purchase Hans – one of Australia’s largest smallgoods operators. George Weston is seeking to acquire the whole Hans business, while Primo intends to purchase all assets of Hans, except for the Blacktown manufacturing facility and the Swickers abattoir and associated pig growing operations.

Hans entered voluntary administration on November 28 due to higher costs and stronger pork competition, which had placed great stress on the profitability of the business.

The company began operations in 1960 and currently operates out of three manufacturing sites: Colmslie and Wacol in Brisbane, and Blacktown in Sydney as well as having a distribution centre in Brisbane (Hemmant). In 2000, they became Australia’s largest smallgoods manufacturer, though they have since relinquished their market leading position. Hans is also the majority shareholder in the Swicker’s factory, which is the second largest pork producer in Australia and employs about 400 people. It operates an abattoir and production facility in Kingaroy, Queensland.

The entire smallgoods sector has been plagued by a number of issues, including higher feed costs caused by the drought and increased competition from subsidised importers selling frozen ham. This has led to recent consolidation of the industry, including the purchase of KR Castlemaine by George Weston Foods early last year.

The ACCC is inviting comment from interested parties on the two proposals until 23 January 2009. More details can be found at: www.accc.gov.au/content/index.phtml/itemId/854788/fromItemId/750991