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Bega Cheese share price drops 8% on bushfire update

The Bega Cheese Ltd (ASX: BGA) share price has been the worst performer on the ASX 200 index on Monday.

In morning trade the diversified food company’s shares have fallen a sizeable 8.5% to $3.95.

Why is the Bega Cheese share price sinking lower today?

Investors have been hitting the sell button in a panic on Monday amid concerns that its operations could be negatively impacted by the devastating bushfires in New South Wales.

Fires are currently raging through the Bega Valley and surrounding areas, where Bega has some of its operations.

Given how hard the company has been hit from the droughts this year, this would be a real blow.

Bega Cheese update.

In response to the share price decline, this morning Bega Cheese released an update.

According to the release, it is continuing to monitor the current bushfires in and around the Bega Valley.

It advised that it operates two sites at Bega in New South Wales. This includes a milk receival and bulk cheese production facility and a cheese cutting and processing facility.

Fortunately, these bushfires have not directly impacted the sites. Furthermore, both sites remain open and fully operational.

However, sadly the fires have impacted a number of its employees and dairy farm suppliers in the region.

The company stated: “We are working closely with our employees, dairy farm suppliers and freight providers to ensure milk can be delivered and processed whilst taking every precaution to ensure the safety of everyone involved.”

“We would like to express our sincere gratitude to our employees, dairy farm suppliers, freight providers, the Bega Valley Shire Council, Rural Fire Service and other services involved in working with us through this challenging period,” it concluded.

Also on the slide today is the Costa Group Holdings Ltd (ASX: CGC) share price. Last week the landlord of some of its berry operations, Vitalharvest Freehold Trust (ASX: VTH), revealed that bushfires had impacted the Tumbarumba berry farm.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended COSTA GRP FPO. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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