Bega Cheese (ASX:BGA) decided to wind down and close its peanut processing business, Peanut Company of Australia, including a phased shutdown of its facilities at Kingaroy and Tolga in Queensland over the next 18 months, according to a Wednesday Australian bourse filing.

The decision came after a 12-month strategic review. One-off cash shutdown costs, predominately relating to redundancies, are expected to be in the range of AU$5 million to AU$10 million and the firm expects limited impairments.

Bega said it had not been able to establish a sustainable business model, despite ongoing investments, and it noted that the business was under sustained financial pressure for several years before its acquisition in 2017.

The business had been incurring operating losses from AU$5 million to AU$10 million per annum.

Bega Group continues to retain two processing facilities in Crestmead and Malanda, as well as its distribution network.

The firm's shares fell 1% in recent trading on Wednesday.