Bega sells off water rights as historic peanut plant shuts
Bega Group has been selling water licences associated with the country’s largest peanut processing facility at Kingaroy in Queensland, as it begins the wind-down and eventual closure of the 101-year-old business.
The ASX-listed food manufacturer announced last month it would begin a phased shutdown over the next 18 months of Peanut Company of Australia, which was established in 1924 as the Peanut Marketing Board, due to mounting losses.
In 2017, Bega bought the peanut company, which was already under financial pressure. Despite upgrades since then, the business was incurring annual losses of $5 million to $10 million, Bega said.
Australia’s peanut industry has been hit with a series of headwinds, including increased competition from imports, stronger returns for growers from other crops, high input costs and declining production, Bega’s chief executive Pete Findlay said last month.
The company had not found a buyer for the business, which operates facilities at Tolga in far north Queensland and at Kingaroy, known as the peanut capital of Australia.
Bega still plans to produce its Australian-grown peanut butter by sourcing peanuts from another food manufacturer. Meanwhile, it has already begun selling off water rights in the Bundaberg region that it had invested in to support peanut production.
Several medium-priority allocations, totalling about 800 megalitres, have been sold in the Bundaberg irrigation area at prices ranging from $3625 per megalitre to $3750 per megalitre.
Next up for sale in the Bundaberg region is a 1000 megalitre high-priority entitlement in the Burnett River system, along with an option for 600 megalitres of medium-priority entitlements.
“Market interest in permanent water entitlements is gaining momentum as interest rates stabilise and investor confidence returns,” said Colliers’ Matthew Tolmachoff, who is handling the sale.
“With the Commonwealth’s water buyback program reshaping supply in the Murray-Darling Basin, Queensland – and particularly the Burnett region – is well-positioned to benefit from increased demand.”
The sale of water rights in Queensland’s river systems comes as agricultural and horticultural investors face steep price rises further south in the Murray-Darling system.
One of the big drivers for price rises further south is the federal government water buyback program and its aim of sending an extra 450 gigalitres of water down the Murray River over three years to ensure its environmental health, according to consultancy Ricardo.
It noted the value of major entitlements – the permanent right to receive an allocation of water – had risen for the first time in three years, increasing by 3 per cent, in its annual report on the southern Murray-Darling Basin water markets, released this month.
The more volatile prices of annual allocations in the southern Murray-Darling Basin jumped over the 2025 year for the first time since 2018-19, with prices 89 per cent to 159 per cent higher at the end of the year.
“After three years of declining entitlement values, the market has turned a corner. Commonwealth buybacks have re-emerged as a major force, reshaping price expectations and driving trade activity across the basin,” Ben Williams, Ricardo associate director and water market advisory lead, said earlier this month.
