CANADA – Canadian dairy giant Saputo has confirmed the closure of its King Island Dairy operation in Tasmania, Australia.
After a ten-month review, Saputo announced on 5 September that the facility will shut down by mid-2025, along with retiring the associated cheese brand. The closure will affect 58 employees.
Saputo Dairy Australia (SDA) had been exploring various commercial and financial alternatives for the King Island Dairy, including the possibility of selling the plant to a third party.
However, according to a statement from SDA, the company has determined that closing the facility is the most viable option to enhance its competitiveness amid shifting market and industry conditions.
Leanne Cutts, president and chief operating officer for Saputo’s international and European divisions, explained that every potential option was considered before the final decision was made.
“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 specialty cheeses,” said Cutts.
Over the last five years, Saputo has invested more than A$40 million (US$26.9 million) across its Tasmanian operations. Despite efforts, the brand has struggled to maintain its place in the highly competitive food industry.
While other Tasmanian brands like Mersey Valley and Tasmanian Heritage continue to perform well, King Island Dairy products have not managed to retain their market position.
Cutts acknowledged the brand’s nostalgic significance to Australians but emphasized the need for Saputo to adapt to modern market realities.
Saputo reassured employees and the local King Island community that they would receive support during the transition period. The company also plans to explore possible redeployment opportunities for affected workers.
The closure of the King Island Dairy is part of Saputo’s broader effort to streamline its manufacturing network, cut costs, and improve operational efficiency.
Last November, Saputo began a review of the facility as part of this wider strategy. The company has also announced other closures, including six sites in the U.S., which are scheduled to shut by early 2025.
In addition, Saputo has been selling off some of its Australian assets. In December, the Australian Competition and Consumer Commission (ACCC) gave the green light for national retailer Coles Group to purchase two of Saputo’s milk processing plants in Erskine Park, New South Wales, and Laverton, Victoria.
Despite the closure of King Island Dairy, Saputo remains committed to its presence in Australia and will continue investing in its operations in north-west Tasmania and other key regions to secure long-term success.
Subscribe to our food and agriculture industry email newsletters that provide busy executives like you with the latest news insights and trends from Africa and the World. SUBSCRIBE HERE
