Canadian dairy giant Saputo has announced the impending closure of its King Island Dairy operation based in Australia. This decision comes after the Tasmanian facility has been under review since November of the previous year. On September 5, the company confirmed that the facility would cease operations, including the retirement of the associated cheese brand, by mid-2025.
The closure will impact around 58 employees, prompting Saputo to emphasize its commitment to supporting these individuals during the transition period. In its statement, the company noted, “Over the past ten months, Saputo Dairy Australia (SDA) has sought to maximize 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.”
Leanne Cutts, president and chief operating officer for Saputo’s international and Europe divisions, stated that every viable option was thoroughly examined. The conclusion reached was that this closure was “the most viable way to strengthen SDA’s competitiveness based on changing industry and market conditions.”
Cutts further elaborated on the significance of King Island Dairy’s heritage, highlighting hopes that the strategic review would lead to a buyer for the nearly 100-year-old facility, known for producing handmade specialty cheeses. Despite investing over A$40 million ($26.9 million) into its Tasmanian operations over the last five years, the brand has struggled to maintain its competitive edge in the food and beverage industry.
While other Tasmanian brands like Mersey Valley and Tasmanian Heritage are thriving, King Island Dairy has not kept pace in today’s ultra-competitive food industry landscape. Cutts reaffirmed that Saputo remains “firmly committed to Australia” and plans to continue investing in other regions and operations to achieve long-term success.
To mitigate the impact on affected employees, the company will seek redeployment opportunities wherever feasible. The review initiated in November was part of a broader strategy to enhance efficiency and reduce costs within Saputo’s manufacturing framework. This initiative coincides with previous closure announcements in the United States and Canada.
In June, for instance, Saputo disclosed plans to close six sites in the U.S. Meanwhile, it has made arrangements to sell additional facilities in Australia. Last December, the Australian Competition and Consumer Commission approved the Coles Group’s acquisition of two of Saputo’s milk processing plants, located in Erskine Park, New South Wales, and Laverton, Victoria.
This development underscores the ongoing challenges facing companies in the food and drink business, particularly in relation to shifting consumer trends and a competitive market. As organizations navigate these changes, maintaining operational agility will be crucial for future growth and success.
