Trade

Victoria’s Tasman retail butchery network collapses, owing millions

Jon Condon, 12/09/2018

 

ONE of Australia’s largest independent retail butchers, Tasman Market Fresh Meats has collapsed, owing millions to creditors.

In a sign of the tough trading conditions in domestic retailing at present, the Tasman business, which operates a network of 17 ‘warehouse’ format retail sites across Melbourne and regional Victoria, went into voluntary administration on Friday night.

PwC Australia’s David McEvoy and Martin Ford have been appointed voluntary administrators.

Tasman was operated and majority-owned by private equity firm, Equity Partners, which bought a 53pc stake in the business from original owner Joe Catalfamo in 2013. Click here to view earlier Beef Central story. Mr Catalfamo had earlier sold his Tasman meat processing interests to JBS Australia in 2008.

Administrators are yet to disclose the extent of funds owed to creditors, but talk around the processing and meat wholesale industries this morning was that the creditor list would be a ‘mile long,’ and some of the larger creditors would get ‘seriously wounded’ by the collapse. One contact suggested meat stock alone could represent exposure of $12-$15 million to creditors. Tasman is said to have lost around $20 million last year, on top of a $1.5 million loss the year before that.

At the time of the retail business sale in 2013, the new owners said they intended expanding the Tasman chain of large-format, stand-alone stores from its original stable of 15 outlets to 30. The business at the time was said to be turning over above $110 million each year.

The Tasman model relies on an ‘OfficeWorks’ style approach to red meat retailing, mostly using large-format, stand-alone stores in strategic population growth corridor locations, offering a wide range of quality meat protein items, in addition to selected, complementary deli and grocery lines.

Where a traditional ‘High-Street’ butcher shop is often around 100sq m in size, the Tasman outlets are up to ten times that footprint. The fit-out was described at the time of the 2013 investment as “reasonably capital intensive, being a long way from the ‘cement and stainless steel’ large-scale warehouse retailing model pioneered in Queensland.”

An experienced large-scale red meat retail operator questioned whether the warehouse retail model followed by Tasman still had a place in the modern meat retail environment.

He felt there were two factors in play. The first was the fact that the customer had to go out of their way to shop in a stand-alone ‘destination’ shop like Tasman to specifically buy meat.

“The convenience factor in picking up meat in the supermarket, or an independent shop at the supermarket’s front entrance, is more important than ever – even when that may be a little more expensive than what can be bought in a warehouse format store,” he said.

The other factor was the typical consumer’s frequency of shopping.

“Ten or 15 years ago, consumers did one big shop to last them each week. Today many prefer to shop virtually daily, and that does not suit the warehouse retail model,” he said.

The contact suggested that the Tasman retail business would have had attractions as a ‘good cash business’ when it operated under the previous ownership, linked to Tasman’s large scale beef and lamb processing – but was much less attractive as a stand-alone business.

The general trading environment for independent retailers may have also contributed to the business being placed in administration, he said.

“The independent retailer – whether they be traditional butchery, fruit and veg, or deli has been, and continues to come under increasing competition from the major supermarket operators,” the contact said.

“Independent meat retailing remains a challenge, but the Tasman model, particularly, may have been more challenging than others, including smaller, better-operated traditional stores.”

Administrators PwC said during the Administration period, the Tasman business would continue to trade while PwC undertook an ‘urgent sale process.’

Commenting on the appointment, administrator David McEvoy said it was intended to continue trading the majority of the store network, with a view to selling the business as a going concern.

PwC was “confident that there will be strong interest from prospective buyers” and hoped to preserve jobs for the majority of the company’s 150 employees.

Tasman outlet in the Melbourne suburb of Frankston

Leave a Reply to John Gunthorpe Cancel Reply

Your email address will not be published. Required fields are marked *

Your comment will not appear until it has been moderated.
Contributions that contravene our Comments Policy will not be published.

Comments

  1. Stan ketchell, 26/08/2019

    It would be nice to have trained meat processing people to cut up the meat, I have never seen so much bone or weird cuts of meat in my life, I guess that you get what you pay for, bring back the old fashioned butcher shops with real trades people and not slap happy band saw bandits

  2. SMITH JOHN, 04/12/2018

    BUSSINESS RUN BY UNQUALIFIED PEOPLE….

  3. Raff, 27/11/2018

    I buy most of my meat from the Werribee store. I have always been happy with the quality, price and service compared to other retailers (especially coles and woolies) and I’ll miss them if they go. Sure they may not have had the pinnacle of stuff, but if you’re a halfway decent cook then you can make your spend stretch pretty far…

  4. peter groves, 05/11/2018

    We often bought meat there ! If you know meat and are prepared to select accordingly, the eating experience was always good !

  5. Richard Greene, 09/10/2018

    Tasman lost their way when the original owners sold the business . Very good to very average staff and continual changes in shop management. Head Office was not hands on enough. Quality fluctuated with meat products as well. Creditors should not lose as owners are all wealthy.

  6. Sally howell, 21/09/2018

    I have shopped at tasman frankston for many years. I stock up my freezer every couple of months. I love their meats. I dont buy crumbed or marinated so i cant comment on them. I find the quality very good. As we are living on a tight budget i have found tasman a great place to buy in bulk from. When i feed visitors they always ask where i buy the delicious meat from. I will miss tasman very much if they close in frankston.

  7. Max, 18/09/2018

    My husband & I were part of the team that opened the first of Tasman Meats ‘Big Store’ in Berwick. Joe C had great work ethics for all back then and these ethics need to be re-visited to ensure the best performance of the Tasman group. These stores can make a difference if the new buyer understands they need to be involved at all levels with good people management, realistic margins & to give employees the respect they all rightly deserve.

  8. suzi major, 16/09/2018

    have bought from tasman in frankston for home and from their rosebud store for work for many years.. never ever have we had a problem of any sort !!..from their meat..deli items..chicken..frozen products and fruit & veg (rosebud) ..everything has always been perfect !!…the price. .the service. .both from the guys behind the counters to the staff on registers. .the outlay of the shops to the cleanliness. .everything has been great !!..just a week ago I was floored by the brilliant service I received in the frankston store when I didn’t want as many osso bucco as was in the ready packs on shelf…was asked to bring over a pack to the counter and they would repack the amount I required !!..a huge thanx to both stores for the many years of great customer experiences I have enjoyed by both your staff and products !!..I will continue to purchase from you until the very end !!

  9. Donna Hormann, 15/09/2018

    I’m a weekly/fortnight visitor to Tasman meats n have done for years, I buy bulk to feed my family of 3 adults n 2 primary school aged children (on occasion my extra 2 older children) I find Tasman meats in Frankston to be conveniently placed right next door to my fruit n veg shop n there reasonably cheap in pricing n of good quality standard of cuts. Only problem I have is the limited car park spaces with myself being disabled. If Tasman Meats shut down then I’ll be forced to look elsewhere to obtain my weekly/fortnight meat supplies but I refuse to buy from supermarket giants there prices are ridiculous to survive on in this day n age even on a tight budget…

  10. Steve Kirby, 13/09/2018

    So many ‘once bitten, twice shy’ stories. Mine was crumbed chicken shnitzels. Once I recoated the denuded schnitz with the extra crumb from the pack, I still had 600 grams of surplus crumb. When your paying $14 per kilo for breadcrumbs…….

  11. John Gunthorpe, 13/09/2018

    Come on Joe time to buy out your partner and do a Kerry Packer. There is no competition for the assets. You sold for gold to JBS, now buy for pennies.

  12. Matt Langers, 12/09/2018

    I did use Tasman a lot when it was a bulk buy for catering to large numbers for big bbq’s etc… Acknowledged the quality wasnt amazing however did the job. Also found the price wasn’t actually that much cheaper in recent times so was finding it harder to justify going.
    I have been shopping from the suburban markets more recently and have found them to give a good range of get what you pay for from low to premium and have found the premium to be very competitively priced. Seeing how busy the markets are does not surprise me at the savings you can make.
    Large format retail is a victim of its own success. Previously paying industrial rate for land now paying closer to a neighbourhood retail rate would be a killer on top of other increasing council rates and operating expenses.

  13. Sue rose, 12/09/2018

    Below average meat

  14. Thomas Jizba, 12/09/2018

    What a shame.
    Sadly, not surprised.
    Was a very profitable company years ago.
    Then again, it was run by a real crew of professionals back then.
    Real meat people who knew their craft.
    Unfortunately, you can have a Ferrari, but if the driver is unqualified, it’s inevitable what’s going to happen.
    When, not if. Shame.

  15. Helen Campbell-Drury, 12/09/2018

    I only went into the Tasman shops a couple of times when travelling through towns. There was nothing to tempt me to buy like our local good butchers have. Butchers have to up-sell now. They are not selling meat, they are selling a convenience. You have to sell quality to get the customers back regularly. No one wins in this situation and you have to feel for the trade creditors.

  16. Bryce Hobson, 12/09/2018

    interesting indeed.. as a consumer of a lot of meat, I just cannot afford the quality of meat I would like to consume – MSA included, Cape Grim (fantasy for me) etc. I have found our local Tasman in South Morang to be on average very reasonable in price vs. quality. I know it’s not the best around, but what do you expect out of a ‘budget’ meat supplier?? You want to play, you pay. I would doubt the demise of Tasman is quality related. Rapid Expansion seems to be the main culprit. Lack of online ordering & delivery also considering the unique site locations.

  17. Andrew Rasmussen, 12/09/2018

    Although my small retail business is not related, my electricity bill has become extreme. I’d hate to think what Tasman were up for in energy bills each month.

  18. Andrew Carruthers, 12/09/2018

    Would buy from a supermarket before Tasmans because of the quality, not the convenience – and that’s saying a lot.

    Most of my meat is sourced from a couple of local butchers 20-30 minutes drive away. Tasmans is 5 mins away. So the convenience isn’t the issue.

  19. David Hill, 12/09/2018

    Great comment Peter, maybe the discerning consumer would be better served if the producer was given a price signal based on the eating quality of the product packed from their stock? You mention that little MSA product was on offer. As an industry we keep talking about value based marketing(VBM), and investing significantly in objective measurements to determine what carcase will deliver the most value. History has shown that for producers, price signals based on value have not kept pace with the objective measurements that have often come about through their levy investment. Whilst MSA has delivered tremendous gains for industry, the fact price signals to a producer have had little correlation with product value has certainly affected outcomes to return on investment.
    Just this week I have seen a grid from a processor who packs a very good brand, the price premium signal to the producer for producing in the top 10pc of MSA is bascially half the premium for the dentition from a YG to a YP. My point is that until premiums consistently reflect value, and not things like dentition and meat colour at grading, and the effect of supply and demand volatility driven by seasons and the dollar is lessened, we will unlikely to see the producer buy into VBM without a high level of scepticism.
    What relevance does this have to this article you may ask, if you used my earlier grid the difference to a producer supplying in the top 10% of MSA to the bottom 20% is $30 a head on a 300kg carcase, my point is that in the trading situation we currently find ourselves in the ‘good, better,best’ purchase price for the Tasman group may have had little difference, but the ability to purchase better and best would have been difficult without the backing of the previous inter grated supply chain.
    We have been talking about a new business model in this industry for a long time now, until it happens we will unfortunately see similar outcomes to the story above happening to people operating in all parts of the supply chain.

    David Hill.
    Independent Director
    Cattle Council of Australia.

  20. Gary Hill, 11/09/2018

    I only went to Tasman twice, but that was enough to stop me returning. Found better quality elsewhere.

  21. Peter Vincent, 11/09/2018

    Perhaps one other influence in the collapse of Tasman was the fact that the red meats offered didn’t meet the expectations of today’s consumer; once bitten, twice shy for most Tasman shoppers. Very little MSA beef was packed and the majority of sheep meats were ordinary to say the least. If nothing else, the demise of Tasman proves that Australian consumers discern the difference and are willing to shun an inferior product and pay for an enjoyable eating experience.

Get Beef Central's news headlines emailed to you -
FREE!