TasFoods says its decision to sell its Pyengana Dairy brand is in the brand’s best interest. A recent business review found the company was not the right vehicle to develop and scale the dairy business.
Pyengana is a premium artisan cheese manufacturer in the remote North-East of Tasmania. It has been making traditional cloth bound cheddar cheese for more than 130 years, with milk sourced from a single herd dairy farm next door.
TasFoods acquired Pyengana in 2017 but has substantially changed its business focus since then, following major operating losses in FY21 and FY22. In 2023, it sold Betta Milk and Meander Valley Dairy to Bega Group that year, with part of the deal being a perpetual royalty free licence to use the Pyengana Dairy brand in Australia.
The company had a major reset during that time, examining every aspect of its portfolio, the upshot being the Pyengana business didn’t achieve the benchmarks set under the company’s capital management framework.
Proceeds from the sale will go towards its poultry supply chain network.
While TasFoods spruiks Pyengana, it has entered a non-binding term sheet to sell to one of its significant shareholders, MSC ATF AgFood Opportunities Fund.
Top line term sheet details include:
- $2 million sale price, plus inventory at settlement date;
- full settlement on or before 31 October 2025;
- TasFoods shareholder approval required mid-October 2025; and
- TasFoods will continue to manage Pyengana Dairy under a paid service agreement with AgFood for a period to ensure the business continues to meet its targets and assist with its growth strategy.
“It is our view that the divestment of Pyengana Dairy to AgFood (or other appropriate buyer) provides the premium brand and artisan award winning products with the best possible opportunity to achieve its full potential of scaling-up under new ownership as part of the business unit’s growth strategy nationally and into export markets overseas,” the company said
