Business not so sweet for another confectioner

Simon Evans
January 21, 2015
The Age
Betta Foods, which supplies Capricorn licorice and Eskimo chocolate snowballs to Woolworths, Coles and Aldi, has collapsed financially just three months after being acquired by British buyout firm Re:Capital.
It is the second big embarrassment for Re:Capital, which last week was forced to call in the administrators to a separate firm, Ernest Hillier, one of Australia’s oldest chocolate makers, which it bought less than a year ago.
Accounting firm Cor Cordis was appointed as voluntary administrator of Melbourne-based Betta Foods on Tuesday night.
Administrator Bruno Secatore said on Wednesday the company was continuing to trade and he had met staff on Wednesday morning.
“We are confident that the business can be sold as a going concern,” he said.
Betta Foods was established in 1954 and is based in the outer Melbourne suburb of Broadmeadows, where it operates a manufacturing plant.
It generates revenue of about $40 million annually and employs 180 people.
Mr Secatore said Cor Cordis was assessing Betta Foods’ financial position.
In addition to supplying private-label confectionery brands to supermarkets, Betta Foods also operates a substantial business supplying ice-cream cones to retailers and the food service market across Australia.
Re:Capital, the international investment arm of British restructuring company Hilco, entered the Australian market a year ago with the intention of buying a number of small food companies to create an overall business with much bigger scale and more bargaining power in negotiations with retailers.
Betta Foods had been controlled by a management team led by chief executive Alex Sloan before the sale to Re:Capital.
Ernest Hillier, based in Coburg in Melbourne’s north, was acquired by Re:Capital in February 2014 from Salvatore Piedimonte and Carmelo Piedimonte. Its main brands are Hillier and Newman’s chocolates. The business will go on sale officially next month, with an information memorandum being prepared.
A number of parties have already expressed interest in buying the Hillier business, which started 101 years ago.
On October 20, 2014, when the acquisition of Betta Foods was announced officially by Re:Capital, there was considerable optimism about the future prospects of Betta Foods and Ernest Hillier.
Paul McGowan, the global chief executive of Re:Capital, said at the time that “following the success of the Ernest Hillier acquisition back in February we are continuing to invest in Australian businesses, where we see true potential for expansion and for growth”.
He said then there were “enormous opportunities for specialist confectionery manufacturing businesses as demand increases” and the group was looking forward to feeding the products through the firm’s global network to a worldwide audience.
The administration of Ernest Hillier continues the rocky times in Australia’s confectionery industry, with 85-year-old chocolate maker Darrell Lea collapsing in September 2012, before being acquired by Queensland pet food magnates Tony and Christina Quinn, who are regulars on the BRW Rich List.
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