Saputo says agreement in place to sell King Island Dairy to new owners

The popular King Island Dairy was set to close in the middle of the year, however new owners have been found, Saputo says. What we know so far.

New owners found for King Island Dairy, Saputo says.

Tasmania’s peak farming body has declared King Island Dairy “is here to stay”, after owner Saputo Dairy Australia announced a buyer just months after warning the iconic business could shut down.  

On Friday, SDA revealed it had reached a sale agreement for the King Island Dairy facility and brand, the on-site cheese store, and two local farms which provide a guaranteed milk supply.

TasFarmers chief executive, Nathan Calman, welcomed the news, saying the dairy’s brand played a crucial role in both King Island’s identity, and economic sustainability.

“We advocated to all levels of government and to Saputo to ensure the site did not close. Our goal was to secure a future owner who would act as a custodian of the factory, preserving its legacy and continuing its operations on the island,” Mr Calman said.

TasFarmers chief executive Nathan Calman. Picture: Stephanie Dalton

“Our primary focus was to ensure that King Island’s dairy production remains on the island, with a viable operational presence and a stable milk supply.

“We look forward to meeting the new owners, and we know King Islanders are relieved and reassured by this announcement.

“It’s fair to say that this sale process has been tough. However, this outcome is far better than the alternative, whether that be closure or King Island Dairy becoming another state-owned enterprise.”

It is understood the buyer is a newly formed entity, King Island Dairy 2 Pty Ltd, with SDA committing to help its workers to transfer their employment to the new owner.

SDA director of operations, Gerard Lourey, said that since last September’s closure announcement, the company had worked with the Tasmanian government on achieving a more favourable outcome.

“We deeply appreciate the ongoing support of our dedicated King Island employees, suppliers, customers, the local council and the Tasmanian government during this challenging period for King Island Dairy,” Mr Lourey said.

“We thank them for their patience, resilience and collaboration.”

King Island mayor, Marcus Blackie described the successful sale as “a remarkable comeback victory” for the dairy, and paid tribute the Office of the Coordinator-General for getting the deal across the line.

King Island mayor Marcus Blackie. For Mercury

“Although our historic King Island Dairy cheese company has been saved, more of the same is clearly not the answer, and we now must pivot towards the future,” Mr Blackie said.

“The enthusiastic new owners will need to undertake significant reform, restructuring and market evolution, then relaunch the brand accordingly.

“I am confident that the Council and all King Islanders will stand behind this necessary reform process and promote our born-again cheese company like never before.”

Premier Jeremy Rockliff said the successful sale had been made possible by the effort of multiple parties, and meant the King Island Dairy had a bright future ahead.

“Not only will King Island Dairy remain open and continue employing locals on the Island for years to come – the Dairy and brand will be coming back into Australian hands.

“This is a big win for all King Islanders, and Tasmanians.

“I look forward to joining the new buyers in the coming days and hearing their plans for the future of King Island Dairy.”

INITIAL: King Island Dairy is set for new owners after a biding agreement has been reached, Saputo Dairy Australia says.

SDA, who announced the business would close mid-2025 if no new owner was found, announced on Friday that a biding agreement had been reached.

It is understood the buyer is a newly formed entity, King Island Dairy 2 Pty Ltd.

The buyer is expected to make an announcement in the coming days.

Saputo has been working with the Tasmanian Government for ways to keep King Island Dairy’s doors open.

SDA director of operations and supply chain Gerard Lourey said they believed the buyer was committed to continuing the manufacturing operations and preserving jobs on King Island.

“We are very pleased to have reached a sale agreement for the buyer to purchase the King Island Dairy facility and brand, the onsite Cheese Store and two local farms that provide a guaranteed milk supply,” he said.

“We deeply appreciate the ongoing support of our dedicated King Island employees, suppliers, customers, the local council and the Tasmanian Government during this challenging period for King Island Dairy. We thank them for their patience, resilience and collaboration.”

SDA said employees would be receive an offer to transfer their employment to the new owner.

MORE TO COME

Originally published as Saputo says agreement in place to sell King Island Dairy to new owners