After more than 100 years in the chocolate business, Ernest Hillier has been placed into voluntary administration.
“This is a very sad day for Ernest Hillier, its employees and their families,” Acting Victorian Premier James Merlino said in January, noting uncertain times for the company’s 60 workers.
Ernest Hillier was established in Sydney’s Pitt Street in 1914 and is widely believed to have been the country’s first chocolate maker. It survived the Great Depression, which saw chocolate sales plummet, and relocated to Melbourne where it became an institution.
The North Coburg-based business was sold last year for $11 million to British company Re Capital, which invests in stressed firms. On January 11, it was handed over to administrators Cor Cordis, which is currently assessing its finances and liaising with employees.
Cor Cordis managing partner Bruno Secatore said it would be business as usual while the company’s financial position is being examined, with Ernest Hillier continuing to produce chocolates for supermarkets and other national retailers including David Jones and Myer.
“It certainly needs an injection of funds. There has been some restructuring but it needs more,” Mr Secatore said.
The Australian Industry Group said the news reflects the increasing costs and competitive pressures faced by local manufacturers.
“Companies with strong brand names, such as Ernest Hillier and Darrell Lea, have found competing with international brands has been increasingly difficult,” the group’s principal advocate for the confectionery sector Tim Piper said.
“Hilliers is right in the middle of the market – they’re competing against the bigger companies that are able to deal with economies of scale.”
Mr Secatore said he was encouraged by early interest in Ernest Hillier from other Australian companies.
This is not the first time a well-known Australian chocolate brand has been offered for sale after suffering financial difficulties. In 2012, iconic Australian confectionery company, Darrell Lea, was acquired by the Quinn family – owners of VIP Petfoods – after money troubles.
Acknowledging Ernest Hillier may have to make similar changes to Darrell Lea, Mr Piper said the confectionery industry must work with the grocery and supermarket sector in order to compete and survive.
“One of the problems is that prices haven’t increased. The supermarkets certainly are squeezing all the smaller- and medium-sized companies and their margins decrease, so it means they have to change their marketing,” he said.
“They [Darrell Lea] got into a bit of strife a couple of years ago and now they’ve re-emerged back into supermarkets, which we hadn’t seen before.
“So I think what we’re seeing is a real change in the confectionery industry… they’re having to deal with supermarkets more and really encourage Australians to be buying some of those Australian names they’ve loved over the years.”