Australia: China’s Chevalier burns $148m in mashed potato play

How could a company with 23 per cent of Australia’s $625 million potato market go bust? Experts point to razor thin margins and the enormous power of supermarket giants Woolworths and Coles as a large part of the problem for a business which three years ago was making $36 million in profits when Chinese conglomerate Chevalier Group bought a 70 per cent stake. The transaction valued the business at $212 million, making Chevalier’s investment about $148 million. It supplies about three-quarters of all the potatoes sold in Woolworths and is a long-standing supplier. A Coles spokesman said on Thursday that Oakville Produce “is not a material supplier” to the supermarket chain. It is understood that Coles accounts for about 1 per cent of Oakville’s total sales. What was then known as Moraitis Group was rebadged as Oakville Produce last year, and along with the biggest fresh potato business in Australia, the firm also ran the biggest onion supply operation. More