South Australian dairy producer Beston Global Food Company said it had experienced “a perfect storm of adverse events” prompting it to go into voluntary administration.

The company is one of the largest exporters of dairy products from South Australia, employing 159 people in the state.

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It is well known for award-winning cheese products, whey, and high purity lactoferrin protein that is sold to pharmaceutical and health nutraceutical companies.

Beston Global Food Company announced to the Australian Securities Exchange (ASX) that post COVID-19 its debts were weighing heavily as a result of interest rate increases, a 300 per cent rise in energy costs and the high cost of raw milk.

“Over the last 12 months, Beston has experienced exceptionally high operating costs, particularly due to onerous energy prices at a time when Australian farm gate milk prices have been uncompetitive in world markets,” the statement to the ASX said.

The company also blamed “unintended consequence of the Australian Dairy Code legislation” that meant the farm gate price of milk was high, putting additional financial pressure on dairy processors.

“(It) does not recognise the volatile nature of dairy markets globally, nor allow appropriate price signals to be captured through the movements in supply and demand and has contributed to the closure of 11 dairy processing businesses in Australia during the past 18 months.”

There are fears Beston Global Food company’s collapse could devastate local dairy farmers, who may also be forced to close down as a result.

The South Australian Dairyfarmers’ Association said several farmers were owed more than $600,000 each.

Accounting firm KPMG was appointed voluntary administrator of the company and said business would continue as usual until recapitalisation was completed, or a sale secured.

Beston chief executive Fabrizio Jorge said the company had an offer from Japanese company Megmilk Snow Brands Co Ltd to buy the cheese and lactoferrin production facility at Jervois, South Australia.

But that proposal fell through on September 20, forcing the company to be put into administration.

“The Megmilk offer would have enabled all of the jobs at Jervois to be preserved and would have led to an increase in demand for milk for processing at the Jervois factory over time,” Jorge said.

“It would have represented a win for the workers, a win for our loyal dairy farmers and ultimately would have been a win for the whole of South Australia as the significance of the Jervois plant introducing premium quality, health enhancing products from dairy have (sic) become increasingly recognised around the world via the global marketing and distribution networks of Megmilk Snow Brands.”

Beston Global Food Company has won more than 160 domestic and international awards for product quality.

The mozzarella and cream cheese products are sold to more than 30 major companies in Australia, Thailand, Philippines, Vietnam, China and Korea.