Dairy Bell falls victim to margin squeeze

Dairy Bell Ice Cream has blamed the "supermarket ice cream wars" and rising labour costs on its decision to close its doors in February.

The company this week announced it would close its two factories in Melbourne and Sydney on 27 February, its last production day, after 44 years of manufacturing.

“Supermarket Ice Cream wars have cost the retailer profit and the manufacturer loss of margin and have reduced our capacity to recover costs for some four years now with our capital being eroded year by year,” the company said in a statement from its directors.

“We tried our own shops with a terrific customer response however, the weekend trade (our best time) made losses due to the high weekend cost of labour in the stores.”

Dairy Bell also predicted that continuing ingredient and labour rises would make plant and machinery replacement and profit budgeting impossible. The company will now redevelop its facility sites for real estate.

“We do not wish to compromise our assets and therefore have decided that the timing is right and the opportunity is there for us to now develop our inner city real estate sites in Melbourne and Sydney,” the company said.

“We are solvent and all of our creditors will be paid in full. It is our decision to close.

“Thank you for your support over the years but as the song goes, you must know when to hold it and know when to fold it.”

Andre Razums and John Stanford founded Dairy Bell in 1970 in Malvern East, Melbourne, and in 1973 Dairy Bell expanded into the NSW market by purchasing the Skybomber Ice block factory at Camperdown.

The company at one point also owned 20 retail outlets across Australia.