Tamar Valley Dairy enters voluntary administration

Struggling Tasmanian yoghurt company Tamar Valley Dairy has entered voluntary administration after a failed mission to resolve its financial problems.

Deloitte Restructuring Services was this week appointed as voluntary administrator of the company which employs 170 people and is located near Launceston.

The company's troubles became public in April when creditors granted the company more time to sort out what it at the time described as a short-term liquidity problem. It also emerged that the company owed creditors up to $9 million.

Tamar Valley Dairy was also reportedly offered a cash lifeline of up to $8 million by four Australian food companies including Victorian dairy manufacturer Bulla, however, company owner and managing director, Archie Matteo, said his preference would be to keep the company in its current structure and ownership.

According to media reports, Deloitte Restructuring Services partner Glen Kanevsky said the 17-year-old business operated in an extremely competitive sector and had been ‘‘challenged by a slowdown in sales and pressure on margins.’’

The company has also blamed its financial woes on problems encountered during the commissioning of its new $20 million factory. The facility reportedly cost $2 million more to build than budgeted and opened eight months later than expected.

Last year it signed a 10-year contract to supply Coles supermarkets nationwide.

Commentators say the financial pressures mounted because of the company growing very quickly over a short period of time.

Kanevsky is reported to have said the company is currently examining the trading position of the business and will be working closely with all key stakeholders to allow the business to continue to operate as normal.

The Australian Workers Union is also seeking urgent talks with the state government about the company's future.

Tamar Valley Dairy website is no longer operating. A creditors’ meeting is scheduled for 2 October in Launceston.