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Vegemite being bought by -- surprise -- Australians

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Latest MoneyWatch headlines 01:10

Vegemite, the salty spread beloved in Australia -- and only Australia, basically -- is being sold by the maker of Oreo cookies to an Australian dairy company.

A jar of the Australian spread Vegemite. REUTERS

The spread and other grocery products are being sold by Mondelez to Bega Cheese in a deal worth about $345 million.

Mondelez International Inc., formerly known as Kraft Foods, said Wednesday it is selling most of its grocery business in Australia and New Zealand to focus on snacks like Oreo cookies and chocolate like Cadbury.

Vegemite was introduced in the 1920s, and the spread made from yeast extract is a staple in Australian households. Although it remains by far the country’s most popular yeast-based spread, its market share and sales have slipped in recent years, according to Euromonitor International. Last year, Vegemite’s sales in Australia were $78.5 million, down from $86.9 million in 2011.

Barry Irvin, Bega Cheese’s executive chairman, attributed the recent declines to changing breakfast habits.

Also included in the sale are other local Australian grocery products, as well as peanut butter and salad dressings that use the Kraft name under licensing. Bega Cheese, which had been producing Kraft cheeses for Mondelez, said it had been looking for opportunities to grow beyond dairy. The diversification “adds stability to Bega Cheese,” Irvin said.

Mondelez, based in Deerfield, Ill., had licensing rights for Kraft products overseas after its split with Kraft Foods in 2012. Mondelez says it is holding on to Philadelphia cream cheese in Australia.

Michael Mitchell, a Mondelez spokesman, said about 200 employees will be offered roles “on comparable terms” with Bega Cheese. He said a manufacturing plant will transfer to Bega, but that there will be no closures.

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