Goodman Fielder trips on bakery losses in Australia and New Zealand
Goodman Fielder reported a net loss after tax of AU$166.7m for the year to June, including a AU$300m write-down on its baking businesses in both Australia and New Zealand.
Economic conditions in Australia and New Zealand resulted in weakened consumer confidence, which impacted buying trends as consumers opted for cheaper alternatives, the company said.
The baking business also incurred significant volume reduction with the loss of a private label contract in Australia and the business did not reduce manufacturing and logistics overheads quickly enough to compensate, it said.
Costs for the company also increased on the back of higher commodity costs while fierce retail competition between supermarket operators drove price cuts which further impacted margins.
Dr. David McKinna, founder and director of Victoria-based consultancy Strategic Insights, had said recently that the strong Australian dollar was the primary reason that Australian processors were finding it hard to compete with imports.
McKinna also said that that the major supermarkets are importing their private label products more than ever and their market power is driving the margins out for food processors.
Goodman Fielder added that the baking business in New Zealand was also impacted by the February earthquake in Christchurch, which forced the closure of the bread plant due to damage.