Saputo Dairy Australia has announced it will close the King Island Dairy factory stripping Tasmania of an economic mainstay and 58 people of jobs.
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The company announced on September 5 it had made the "difficult decision" to start the final operating season of King Island Dairy with a view to closing the facility and retiring the brand in the middle of next year.
"Over the past 10 months, SDA has sought to maximise value for the business by conducting an intensive review of all commercial and financial alternatives for King Island Dairy, including a potential sale to a third party," the company said in a statement.
"SDA's immediate focus will be to work with its valued King Island employees, dairy farmers and the broader King Island community to support them through the transition period."
President and Chief Operating Officer Leanne Cutts said the decision had been made after "thoroughly reviewing every possible option."
"Closure of the facility was determined as the most viable way to strengthen SDA's competitiveness based on changing industry and market conditions," she said.
"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.
"It is a unique brand, with a plant that is nearly 100 years old and designed to produce hand-made cheeses."
The company said it had invested more than $40 million in all its Tasmanian operations over the past five years and while brands such as Mersey Valley and Tasmanian Heritage were thriving the King Island Dairy brand has "not maintained its position in today's ultra-competitive food industry".
"This decision does not reflect the commitment of our hard-working and dedicated King Island employees and dairy farmers," Saputo said.
"The King Island community has done everything they can to support us and we will continue to work collaboratively with the Tasmanian Government.
"SDA remains firmly committed to Australia and will continue to invest in North-West Tasmania, as well as our other operating and supply regions, to deliver on our vision for long-term success here."
The 58 employees to be impacted have been informed of the decision.
"Where possible, SDA will identify redeployment opportunities, and where alternative roles are not available, employees will be provided with their full entitlements and outplacement support," the company said.
SDA will consult with employees, union representatives, dairy farmers, customers, King Island Council and the Tasmanian Government to discuss the impacts of this decision and ongoing transition support.
"In the interim, King Island Dairy will continue producing its cheeses as the business develops a closure transition plan," the company said.
