A Bright Food future as China-based group expands with WA cheese acquisition

Posted by AFN Staff Writers on 15th January 2014
Mundella Foods has been acquired by China-based Bright Food Group

China’s Bright Food Group Co Ltd (Bright Food) has agreed to buy Western Australian dairy company Mundella Foods, expanding the conglomerate’s global reach and boosting its exposure to the dairy market.

Through its Australian subsidiary, Manassen Foods, Bright Food has signed an agreement to buy Mundella. Australian Food News reported in August 2011 that Bright Food had acquired a 75 per cent share of Manassen Foods, which supplies Australian retailers with brands such as Holland House Cakes, Ryvita, Walker’s Shortbread, Coffex Coffee, Marion’s Kitchen, Paul Newman’s Own, Triden, Wokka, Jelly Belly, Castello Cheese, dried fruit brands Sunbeam and Angas Park, and the Margaret River brand.

The terms of the Mundella Foods deal have reportedly been decided but the transaction value will be decided once Mundella Food’s 2013 financial results are available.

Mundella Foods was established in 1974 by Western Australian dairy farmers, Peter and Anne Hector, because they had a surplus of milk. They built a small factory and Mundella began supplying local shops with soft cheese. In time, the Company expanded its operations to include yoghurts and drinking yoghurts, which it supplies to supermarkets in Western Australia.

Mundella Foods’ dairy offerings include Lifestyle Range Yoghurt, Greek Yoghurt, Little Greek Ones, Premium Yoghurt, Reduced Fat Yoghurt, Feta Cheese, Ricotta Cheese, Cottage Cheese and a Probiotic Drinking Yoghurt.

According to market research organisation Nielsen’s ‘Retail World Grocery Guide 2012’, Mundella Foods held 3.1 per cent value and 3.2 per cent volume share in the Ricotta cheese category in Australia in 2012, 0.1 per cent value and volume share of the Plain Cottage Cheese category, 0.1 per cent value and volume share of the Entertaining cheese category, 0.1 per cent value and volume share of the Block cheese category. Its share of the $998.6 million yoghurt category in 2012 was 1.2 per cent value and 1.3 per cent volume.

Bright Food’s international portfolio also includes UK-based cereal manufacturer Weetabix (not to be confused with The Sanitarium Company’s top-selling Australian brand Weetbix), which it acquired in November 2013, and New Zealand-based dairy company Synlait Milk Ltd. Bright Foods has also sought to acquire others in Australia’s sugar, dairy, health supplements and agricultural industries.

Australian dairy draws international interest

Interest in Australian dairy assets has grown due to surging sales in Asia of both traditional products such as milk and cheese and for value-added dairy products such as high-tech nutraceuticals and probiotics.

The takeover battle for Victorian dairy processor Warrnambool Cheese and Butter (WCB) has seen Canadian dairy company Saputo face off against Australian dairy co-operative Murray Goulburn.

Saputo’s offer of $9 cash per WCB share is steadily gathering support as Murray Goulburn’s rival bid of $9.50 cash per WCB share awaits regulatory approval.

WCB’s Board of Directors is still favouring Saputo’s offer over Murray Goulburn’s, advising shareholders to reject the offer from Murray Goulburn.

There has been speculation over the role dairy company Bega, which dropped out of the takeover battle in December 2013 but holds an 18.8 per cent share of WCB, and food manufacturer Lion, which acquired a 9.99 per cent share of WCB in November 2013, might play in the final outcome. If Saputo gains Bega’s share of WCB, industry commentators  have suggested Lion will follow suit.