Canadian dairy giant Saputo has announced its intention to close the King Island Dairy in mid-2025.
The news broke while the company is in the midst of an industrial dispute with workers at its Burnie operations over pay levels.
Saputo Dairy Australia said it was intending to retire the King Island Dairy brand following a ‘strategic review’ into its operations.
It is estimated that 58 jobs will be impacted by the closure.
SDA said it had spent the past 10 months reviewing financial and commercial alternatives for King Island Dairy, including a potential sale. The company however has been unable to find a buyer.
“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,” Leanne Cutts, President and Chief Operating Officer (International and Europe), Saputo Inc, said.
“It is a unique brand, with a plant that is nearly 100 years old and designed to produce hand-made specialty cheeses. We have invested more than $40m in all our Tasmanian operations over the past five years.”
“While our other Tasmanian brands such as Mersey Valley and Tasmanian Heritage are thriving, and 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.”
Premier Jeremy Rockliff labelled the news ‘disappointing’ and said the government would provide support to the company’s workers, farmers, and the wider island community.
“We are also working with the company in an effort to find a new operator for this iconic dairy,” he said.
When asked about a prospective closure back in February, Rockliff had said: “That won’t happen. Not on my watch.”
Labor said Tasmanians have once again been “let down by a Premier who never delivers what he promises.”
Shadow Minister for Primary Industry Janie Finlay said that these job losses will further damage confidence in the government’s ability to manage the Tasmanian economy and provide safe, secure, well-paid jobs for workers and their families.
“Everything needs to be done now to make sure that hard-working dairy workers who have devoted literally decades to this business are looked after as much as possible,” said Neil Smith, United Workers Union’s National Dairy Co-ordinator.
“If a sale can’t be achieved, we are happy that the company has already flagged as an option redeployment to Saputo’s other businesses, whether they are in Tasmania or in Victoria.
“Of course, during the consultation period we expect to understand just how that will occur, and how people can put their hands up if they want. If redeployment can’t occur, or it doesn’t suit workers’ family circumstances, then we want to ensure that people are paid justly for their years of labour.”
Just 10 days ago Unions Tasmania said they continued to stand in solidarity with Australian Manufacturing Workers Union (AMWU) and Communications Electrical Plumbing Union (CEPU) members at Saputo Dairy and encouraged the community to continue to boycott Saputo products until the company pays its Tasmanian workers fairly.
Unions Tasmania Secretary, Jessica Munday, said that the campaign by Saputo members to close the 23.5% mainland pay gap that exists between their Victorian and Tasmanian sites is inspiring workers across Tasmania to ramp up campaigns for mainland wages in other workplaces.
“There is a tidal wave of Tasmania workers coming and they are fed up, frustrated and ready to fight for fair wages,” said Munday.
The strike action by the Saputo workers at their Burnie facility commenced in May.
Background
Saputo is a global dairy processor domiciled in Canada (28% of fiscal 2022 sales) with operations in the United States (43%), the U.K. (6%), and other international markets (23%). It sells cheese, cream, fluid milk, and other dairy products. In the retail segment (50% of revenue), its mix of brands include Saputo, Armstrong, Cheer, Cathedral City, and Frylight. Saputo also competes in food service (30% of revenue) and industrials (20% of revenue), which houses its ingredients business.
Listed on the Toronto Stock Exchange, Saputo shares have fallen from $40.34 five years ago to their current price of $29.76.
