Finance

“You must know when to hold it and know when to fold it”: Dairy Bell ice-creamery to close after 45 years in business

Eloise Keating /

A popular Melbourne ice-creamery will serve its last ice-cream cones next month, after 45 years in business.

The first Dairy Bell ice-creams were served in 1970 but production at the company’s factories in the Melbourne suburb of Malvern East and Sydney will stop on February 27. Its five stores will close once the final batch of ice-cream runs out.

While the $800 million Australian ice-cream industry continues to expand thanks to growing demand for premium products, the founders and directors of Dairy Bell said in an announcement on the company’s website increasing competition and lower margins mean it is no longer viable to continue trading.

The announcement follows the collapse of 28-year-old Western Australian ice-creamery, Azzura Gelati, which entered voluntary administration last month.

“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,” said the founders and directors of Dairy Bell.

“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. Indications for the future are of continuing ingredient and labour rises making plant and machinery replacement and profit budgeting impossible.”

“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, who founded Dairy Bell with John Stanford in 1970, told SmartCompany it was a “very difficult” decision to make but said it was important to be able to pay “all our people what they are entitled to”, including suppliers, and to be able to do so with “dignity”.

“We felt closure was a better option than trying to sell,” Razums says.

“It’s all our own work, its 40 years of ourselves and we didn’t want to let someone else have that. Money is not the only thing. There is such a thing as care for what you’ve done all your life.”

Rising staff costs, especially weekend penalty rates, have contributed to the decision to close Dairy Bell, which once operated as many as 20 stores across the country, with Razums saying it became increasingly difficult for the Dairy Bell to do “weekend work in a profitable way”.

“The costs have been rising for a while … but it’s not right to increase the price of your ice cream on the weekends.”

Razums says that upon closing the factories and stores, the directors of Dairy Bell will focus on developing the company’s inner city properties in Melbourne and Sydney.

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Eloise Keating

Eloise Keating is the editor of SmartCompany. Previously, Eloise was news editor at Books+Publishing, the trade press for the Australian book industry.

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