FRANCE – French dairy giant Lactalis has announced plans to close its yogurt and desserts plant in Echuca, Victoria, Australia, affecting approximately 74 employees and contractors.

This decision is part of Lactalis’ strategic restructuring efforts to streamline operations and consolidate its local yogurt and desserts business into a single regional hub in Bendigo, Victoria.

Lactalis will invest A$85 million (US$56.3 million) over three years to enhance manufacturing and supply chain capabilities across regional Victoria, focusing on increasing capacity and advancing environmental sustainability, technology, and automation.

Mal Carseldine, CEO of Lactalis’ Australian business, stated that the decision to consolidate operations was based on a comprehensive review of the yogurt and desserts division.

“Our long-term plan to meet future growth aspirations was made after a detailed review of our yogurt and desserts division. The plan sees us have one regional hub in Victoria that is fully utilised,” he said.

Factors such as milk processing capability, operating costs, and site layouts led to the selection of Bendigo as the preferred location to support future growth aspirations in Victoria.”

In addition, he revealed that the closure of the Echuca plant reflects Lactalis’ commitment to optimizing operations despite the impact on affected employees and contractors.

Meanwhile, he noted that the company is engaging in consultations with staff regarding redeployment opportunities and is committed to supporting affected individuals during this transition.

However, the decision has drawn criticism from the Australian Manufacturing Workers’ Union, with concerns raised about the lack of clarity surrounding the closure decision.

Chris Spinder, an organizer with the union, emphasized the importance of collaborative dialogue before such decisions are made.

In a separate development, Lactalis faced a fine of A$950,000 (approximately US$644,000) for breaching Australia’s dairy code of conduct during the 2020-21 milk season.

The Australian Competition and Consumer Commission (ACCC) initiated legal action against Lactalis, alleging violations of the Dairy Code of Conduct, leading to the imposition of the fine.

Despite challenges, Lactalis remains committed to its long-term strategy and aims to navigate market complexities while ensuring sustainable growth and profitability in the dairy industry.

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