Australian organic dairy co-op goes into administration

The farmer-owned business has been struggling with pressures from Covid-19, delayed sales and a contracting Chinese market

The Organic Dairy Farmers of Australia (ODFA), owned by more than 40 family farmers, has entered voluntary administration owing more than AU$11m.

The co-op said pressures including Covid-19 and a shrinking Chinese market have contributed to its problems.

The largest producer of certified organic milk in Australia, it was established as a co-op in 2002 with farms in Victoria and Tasmania. Headquartered in Geelong, near Melbourne, it produces the
True Organic brand of butter and supplies milk for FiveAM Yoghurt, Lemnos, and Pure Organic Milk.

But contraction in its Chinese market – which had been a focus of the co-op’s export business – the pressures of the Covid-19 pandemic and delayed sales have all hit its finances.

Deloitte has taken over as administrator from the original appointment Worrells Solvency and Forensic Accountants. OFDA says it hopes for a structured and transparent approach as it works through its current business challenges.

All ODFA operations are trading and all employees are continuing in their respective roles with the administration still in its infancy. Its Geelong plant employs 22 people and nine contractors.

Deloitte has told the Australian broadcaster ABC the company owes National Australia Bank AU $8m and unsecured creditors, including its farmers, between $3.5 and $5m.

Under the voluntary administration process, the first meeting of creditors has been scheduled for today, 27 May.

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