Dairy behind Cheer cheese to close factory and sack up to 75 workers

The dairy behind one of Australia’s most beloved cheeses has made a huge announcement about the product’s future.

The Canadian dairy behind Cheers cheese will close one of its Australian factories and sack up to 75 workers after major financial losses and milk supply issues.

Saputo has announced it will close its Maffra factory in the Gippsland region of Victoria, less than a decade after it bought back the brand in 2015.

The company will also reduce the capacity of its bulk powders production facility in Leongatha, southeast of Melbourne and the cheese packaging facility at Mil-Lel in South Australia.

The Canadian dairy behind Cheers cheese will close one of its Australian factories. Picture: Benedict Brook / Stephen Hagan

Saputo international president and chief operating officer Leanne Cutts said it was a “very difficult decision”.

“Today’s announcement continues our journey towards long-term success for our business in Australia by increasing our efficiency and productivity, and making our business more competitive,” Ms Cutts said.

Saputo Australia reported a $54.4m annual loss for the 12 months to March 31 – a stark difference to the $30.6m net profit in 2021.

The company's milk collections have also plummeted to 2 billion litres from a forecasted 3.1 billion litres in just three years.

Saputo reported a $54.4m loss over the last 12 months to March. Picture: Supplied

“We expect no changes to our valued farmer relationships, with suppliers’ milk continuing to be collected and processed across our network,” Ms Cutts said.

Saputo previously bought Murray Goulburn dairy – which produces Devondale milk – for $1.3bn in 2016 and Lion’s specialty cheese business – behind Mersey Valley cheese – for $280m three years ago.

The major news comes after the company has already closed two milk dryers at its Maffra factory and shut down its individual wrapped cheese slice factory in Cobram on the Murray River.

Saputo plans to help sacked employees to be redeployed or retrained. Picture: Facebook

Ms Cutts said Saputo will work with affected employees to find them redeployment and retraining opportunities.

“Site management will work closely with affected employees at the three impacted sites to discuss redeployment and retraining opportunities,” she said.

“Where alternative roles are not available, these employees will be provided with severance and outplacement support.”

The company changed its name from Coon to Cheer in 2020 after years of public pressure to move away from an accidental connotation to the racist slur against people of colour.