A deal that has returned Vegemite to Australian hands has delighted Dick Smith, the most vocal critic of the yeast spread's foreign ownership so much that he has pumped $250,000 into the product's new owner, Bega Cheese.
The ASX-listed dairy producer revealed it would buy Vegemite and a host of other Kraft products from the American giant Mondelez for $460 million on Thursday morning.
More BusinessDay Videos
- Video duration
- 00:57
Gillard and Obama butt heads over Vegemite
Gillard and Obama butt heads over Vegemite
Back in 2011, former prime minister Julia Gillard was asked about Vegemite while visiting a US high school.
Up Next
NAB admits security breach
- Video duration
- 00:41
- Video duration
- 00:41
NAB admits security breach
NAB admits security breach
The bank says human error was to blame when it sent details of 65,000 customers to the wrong email address in December.
Up Next
Netflix's decade of streaming
- Video duration
- 01:50
- Video duration
- 01:50
Netflix's decade of streaming
Netflix's decade of streaming
It's now been 10 years since Netflix made its most important strategic shift away from mail-in DVDs and into Internet streaming.
Up Next
Australia set to join global reflation
- Video duration
- 03:38
- Video duration
- 03:38
Australia set to join global reflation
Australia set to join global reflation
With inflation increasing in Europe, the UK, US and China, we address whether Australia will join this growing list and what could it mean for the RBA. (This video was produced in commercial partnership between Fairfax Media and IG Markets)
Up Next
Unemployment rate rises
- Video duration
- 00:26
- Video duration
- 00:26
Unemployment rate rises
Unemployment rate rises
In a surprise to economists, the unemployment rate in December rose to 5.8 per cent, from 5.7 per cent in November. Vision courtesy ABC News 24.
Up Next
China's first ballpoint pen
- Video duration
- 01:01
- Video duration
- 01:01
China's first ballpoint pen
China's first ballpoint pen
China produces about 38 billion ballpoint pens a year, but the country has never, until now, been able to produce its complicated tip.
Up Next
Supermarket results: Woolworths could win sales race
- Video duration
- 01:59
- Video duration
- 01:59
Supermarket results: Woolworths could win ...
Supermarket results: Woolworths could win sales race
Fairfax's Catie Low explains predictions that Woolworths will shake off its 29-quarter losing streak to win the second quarter sales race.
Gillard and Obama butt heads over Vegemite
Back in 2011, former prime minister Julia Gillard was asked about Vegemite while visiting a US high school.
"We are buying an iconic brand in Vegemite," Bega executive chairman Barry Irvin said. "These iconic brands alongside the Bega brand are strong building blocks to enable Bega Cheese to become a great consumer goods business."
Entrepreneur and foreign investment critic Smith said it was fantastic and "wonderful for Australia" for the spread, which first went on sale in 1923, to be back in local hands as profits would now remain in Australia.
Related Content
"I've wanted to buy Vegemite for over 20 years and they've never answered me, so I've had other well-known Australian businessmen write to them to see if they would sell it, and they've never gotten an answer," Mr Smith said.
"People are so addicted to it, so I'm sure it would have been a fantastic money spinner."
Instead, Mr Smith hatched a plan in 1999 to launch his own Australian-owned rival product. After 13 years tinkering with the recipe, Dick Smith Food's OzEmite went on sale in 2012.
While Bega is now a yeast spread competitor, Mr Smith said he bought "about a quarter of a million dollars' worth" of the dairy processor's shares on Thursday and would probably buy more.
He won't stop selling OzEmite however, even though its stated reason for existing is now largely void.
"OzEmite is gluten free: it's made from corn," Mr Smith said. "I don't like competing with another Aussie company but in this particular case we'll probably keep it because the gluten-free people want it."
Investors cheered the news of Bega's purchase, with shares up a hefty 15 per cent to $5.16, recouping part of the losses recorded last October when concerns over slow sales of its infant milk formula joint venture with Blackmores saw the shares dumped.
All 200 staff at the Port Melbourne site Bega is buying will be retained, including administration staff, at least initially, as Bega intends to operate the new business "as a separate platform", Mr Irvin said.
The sale also includes Kraft products like peanut butter and mayonnaise and Mac and Cheese. However ownership of these brands will transfer back to the US-controlled group at the end of the year. Mr Irvin said Bega would try to retain the right to use the Kraft brand for those products.
Bega will fund the aquisition through debt.