King Island Dairy will close mid-2025 after a buyer could not be found for the Saputo-owned factory. (AAP Image/James Ross)
An award-winning cheese manufacturer with century-long roots on a rugged Bass Strait island will close after a buyer could not be found.
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Owner Saputo Australia on Thursday, September 5, announced King Island Dairy would have one final season before shutting in mid-2025, ending the brand.
The future of the business had been under a cloud for 10 months after Saputo launched a strategic review of the facility.
King Island Dairy operations began in the early 1900s and is one of the biggest employers in the tiny outpost, home to about 1600 people.
Saputo chief operating officer Leanne Cutts said the decision to wind up the business was difficult.
She said “every possible option” had been reviewed but closure was the most viable way to strengthen Saputo’s competitiveness in a changing market.
“As King Island Dairy’s historic roots are deeply embedded in the region, it was hoped the strategic review would identify a potential buyer for the facility,” Ms Cutts said.
“It is a unique brand, with a plant that is nearly 100 years old.
“Our other Tasmanian brands such as Mersey Valley and Tasmanian Heritage are thriving.
“(While) King Island Dairy products hold a nostalgic place in the hearts of Australians, the brand has not maintained its position in today’s ultra-competitive food industry.”
King Island Dairy’s historic former building. (AAP Image/James Ross)
Saputo, which bought King Island Dairy in 2019, says 58 employees will be impacted but “redeployment opportunities” would be identified where possible.
Ms Cutts said Saputo would work with dairy farmers and the island’s broader community.
Tasmanian Premier Jeremy Rockliff said Saputo’s decision was very disappointing.
“We are providing immediate support to the company’s workers, farmers and the wider island community,” he said.
Mr Rockliff said the state government was prepared to work with the company in a further effort to find a new operator.
Melina Morrison, chief executive officer of the Business Council of Co-operatives and Mutuals (BCCM), said this was another sad day for dairy processing in Australia.
“Every time we lose food and beverage processing infrastructure in Australia, we move closer to being net importers of manufactured products even in staples like dairy,” Ms Morrison said.
“Our hope — like the hopes expressed by the dairy farmers and Saputo workers on King Island — is that another owner can be found.
“Whatever the fate of the cheese factory, it’s timely to think about whether it’s in the long-term interests of Australian farmers and farm communities to have so much processing ownership held offshore.
“When it’s a co-op like Norco or Mountain Milk, the business decisions are made close to home and made in the interests of the farmers who own the value-adding supply chain.”
Saputo describes itself as one of the top 10 dairy processors in the world.
King Island has a unique climate based on its location and provides lush grazing for cows and unusually sweet milk.
– with AAP.
Storage facilities at the King Island Dairy factory. (AAP Image/James Ross)
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