The Ferrero Group, known for products like Nutella and Ferrero Rocher, is abandoning its $70million hazelnut farm.
The company cites unfavourable long-term climate conditions as the reason behind this decision. The Australian branch of Ferrero expresses regret over discontinuing the farm, "Given recent adverse weather conditions, the pilot study found that the region's climate in the long term is not conducive to hazelnut farming"
The 2,600-hectare land with a million hazelnut trees planted since 2013 which will be removed is expected to be sold for over $80 million.
This development is a setback for the hazelnut industry. When the initial $70 million venture was announced, it was anticipated to boost local hazelnut production. Ferrero had hoped to produce about 5,000 tonnes from its operation at Narrandera, this is in response to figures that showed Australia imports 3,500 tonnes of hazelnuts a year.
Despite the disappointment, Hazelnut Growers of Australia hope that Australian hazelnuts can still find a place in Ferrero's products.
"I think it's important that we continue to support them as a company in the sense that, as the other producers increase, then maybe their volumes can be utilised by Ferrero in their processing facilities," said Trevor Ranford, Hazelnut Growers of Australia Executive Officer.
The 2,600-hectare property equipped with over 11,000 megalitres of water entitlements is now up for sale. The large-scale irrigated horticulture operation presents a rare opportunity for commercial buyers. The removal of the hazelnut trees opens the pool for a variety of investment opportunities as reliable irrigation and water entitlements are baked into the deal.
However, for the Ferrero Group, their window of opportunity has closed. They stated, "Over the duration of the 10-year project hazelnut yields have fallen below expectations making the project, unfortunately, no longer commercially viable."
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