John and Karen Hunt have been collateral damage in the Beston collapse, with the company owing the family $700,000 in unpaid milk.
Mount Gambier dairy farmer John Hunt has been left with more than a bitter taste in his mouth after the collapse of milk processor Beston Global Food Company has left him $700,000 out of pocket in unpaid milk.
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John who farms with his wife Karen, and son Daniel and wife Sam, at Mount Gambier, is disgusted by the company’s behaviour.
“Basically, Beston has used the sale of our product to draw down debt for their own creditors and left us unpaid for two months milk supply.
“The CEO sat around our table, looked us in the eye and continually assured us we would get paid — it’s the lies and deceit that has been so hard to take,” John said.
He said the non-payment of the milk cheque is a double whammy.
“We don’t get paid, but we still have creditors to pay, so we have to borrow the money to replace our stolen milk cheques — effectively, this has cost our business $1.4 million.
“It won’t be easy, and it sets us back five years, but there are farmers out there under severe financial and mental stress and this will be the end of them,” John said.
John said there needed to be some sort of law to make farmers secured creditors and banks should have a responsibility to contact ASIC if a company can’t pay its creditors.
“A romalpa clause should be implemented so any product remains the property of the farmer until sold, and currently, if a processor breaks a contract, a farmer is without two months payment.”
Industry needs to protect dairy farmers in the future so no other farmer has to go through what these former Beston suppliers are experiencing.
“We need to make sure processors are held accountable — continuing to trade while insolvent is illegal and hiding behind safe harbour clauses immoral.
“We were receiving emails saying we were going to get paid on these particular dates, but they came and went and it never happened, and we now understand the bank stopped their credit so they never had the ability to pay us anyway.”
John said once Bestons broke the contract, it asked the business to stay another 19 days as the sale of the company was imminent.
“If we left we would not receive any outstanding money, nor would any other farmers who were owed money also — they said the sale depended on milk that was currently supplied and we wanted to do the right thing, but this ended up costing us another $140,000.
“There was no sorry, no nothing.
“They didn’t pay and now they are gone.
“The board and CEO received all their entitlements and we just have to try and pick ourselves up and move forward somehow.”
John said while he didn’t begrudge Beston’s workforce receiving their entitlements, he said there had to be some sort of security and protection for farmers.
“It’s a pretty tough to take when the supplier of the raw product remains unpaid and is last in line for payment,” he said.
The demise of Bestons is a blow for the whole South Australian dairy industry.
“We need another player in the market and Beston’s had a state-of-the-art plant and quality, award winning products, but the board just couldn’t manage it properly.”
At one stage while in administration, there was a potential offer on the table from a group of investors to purchase the company.
“That idea ran out of time to get off the ground, but it would have meant those of us who remained unpaid could have been compensated via some sort of share arrangement — the total closure of the processor and sale of the plant now means we are really left with nothing.”
Daniel and Sam Hunt purchased their own farm 12 months ago and have had to deal with the impact of Beston's demise on their business.
John and Karen have been farming on their Mount Gambier property for 14 years and milk 450 cows, while Daniel and Sam milk 280 cows and only went out on their own 12 months ago.
He said the financial blow had been worsened by the fact the family experienced their worst autumn on record.
“We have had to buy in a lot of feed, which put pressure on the bottom line, and then any hay we did manage to cut has gone mouldy in all this rain, so the last few months have really been quite the journey.
“To be honest, I was so angry at the start when this all happened, but now I just feel gutted and flat,” John said.
On a positive note, John said his bank had been fantastic and he had received a lot of support from the wider community.
“We have had many people ring up and check in to see if we are okay, which has been nice.”
