Australian fresh produce heavyweight Costa Group has entered into an agreement to acquire 2PH Farms, based in central Queensland for $220.
Costa Group citrus general manager Elliot Jones said the deal was the result of a long-standing relationship between the two entities. "We've had a long relationship with owners Craig and Bindi Pressler managing their domestic marketing program," he said.
"It's been well known by them that we've had ambition, should they be willing to sell the property and the operation, that we would be an interested buyer.
"This year Craig approached us and we obviously responded favourably that we would like to purchase the operation."
Mr Jones said the acquisition would allow Costa Group to expand its export operations into the Chinese market.
"We're primarily an export-focused company with some very strong domestic programs," he said.
"It provides access into what is 2PH's core market of China, whereas Costa has been primarily focused on Japan and some other export markets with minimal exposure to China.
"We've long held a desire to build a greater presence in China and this will also help as we bring that 2PH China program into our business."
While there are existing concerns about the continued accessibility of the Chinese market, with other major commodities such as beef and barley previously being locked out, Mr Jones says he is confident that the fruit industry will have continued passage into China.
"We can't presume to know exactly what's going to happen, but at the moment, we have confidence that fruit is arriving into China now and it's moving through the system relatively uninterrupted," he said.
"We have confidence that the Chinese market and the consumers have high demand for 2PH-branded mandarins and we'd hope that the market continues to be open so that we can continue to capitalise into that."
The acquisition of 2PH Farms will also allow Costa Group to extend its citrus season, as its existing operations are based in southern Australia.
"The 2PH business is complementary to our business, from a timing point of view, being in Queensland versus in the Southern production region with its earlier season," Mr Jones said.
The deal will also allow give Costa Group proprietary rights to two mandarin varieties currently owned by 2PH Farms; Amorette and Phoenix.
"We can look to extend their season by producing in the south," Mr Jones said. "I think what [this deal] ultimately does is it gives Costa a strengthened position."
Aside from uncertain trade relations with China, the agricultural industry has also been plagued by labour shortages resulting from a decreased international workforce due to COVID-19.
Mr Jones says this situation is something they will continue to monitor within the citrus industry. "It's been a very challenging situation over the last 18 months," he said.
"We're not taking our eye off the ball and we know how challenging it will be if we don't have access to sufficient labour.
"Both 2PH and Costa are approved employers in the Seasonal Worker Program with Pacific Islander workers that come into Australia and both businesses have had quarantine facilities either on-site or in our local region in the case of South Australia.
"We feel that for both operations in 2PH in Emerald and also in our operations in SA and Victoria, we have adequate labour for this season and for going into the summer for the table grape and the pruning activities, and alike into next season for citrus.
"For the moment we're feeling a little bit more comfortable."