Bega Cheese Case

The study case company, Bega Cheese Ltd, is a cheese and dairy company that is totally owned and operated by Australians. Established in 1899 as the Bega Co-operative Creamery Company, Bega cheese is currently on the list of the Australia largest companies and the nation fifth-biggest diary processer with an estimate value of AU $775 million. The company went public and was listed in ASX in 2011, even though about half of shares publicly traded are still held by Bega's farmer-suppliers. ‘Close to half of Bega Cheese's revenue (as of 2016) comes from their retail cheese and processed cheese products, with their flagship "Bega" brand holding 15.7% of the Australian retail cheese market’ (Bega Cheese Limited, 2016). Together with other retail brands such as "Tatura", "Royal Victoria", "Melbourne" and "Dairymont", the …show more content…
The ultra-drop of the milk prices was the main reason behind the drop of the company share price in 2016 where the share price went down to as low as $ 4.24. On the other hand, Bega has released that it has been experiencing a challenging business environment for its dairy nutritionals platform, particularly in infant formula and milk powders. The blame was placed on market rebalances and how customers are being overly cautious around the potential impact of regulation changes in the China market. Consequently, analysts weren’t expecting any recovery for Bega share prices in 2017 due to the modest financial performance in 2016; however, the company share price jumped over 63% by July 2017 boosted by the company $460 million acquisition of Mondelez Grocery Business which is expected to increase the company market share by 15%. Last June, the company lunched a $160 million capital raising to have an adequate cash on hands for any further growth opportunity that would come across in the near