Saputo announces closure of King Island Dairy

Tasmania’s top farmer has slammed Saputo for calling time on King Island Dairy, with the brand set to disappear. Here’s why.

Saputo needs to look harder to find a buyer for King Island Dairy, Tasmania’s top farmer says, warning of the economic impact of closure.

The Canadian dairy giant announced on Thursday it would close the King Island processing site and retire the brand next year, although Tasmania’s premier says the search for a new operator isn’t over.

TasFarmers president Ian Sauer said Saputo’s decision would have “a devastating impact on dairy farmers and the island community”.

“This decision is a kick in the guts for farmers,” Mr Sauer said.

“Dairy is a major employer and the flow-on effect will be felt through the entire community, from the supermarket to the hotel, and even the local hospital.

“These farmers have faced relentless hardships, and for those who’ve worked so hard to build a world-renowned and respected brand, this blow from Saputo is heartbreaking.

“We urge Saputo to ensure a smooth as possible transition, they need to look harder for a buyer of the dairy or support farmers as they shift into other enterprises.”

Premier Jeremy Rockcliff took to social media to say the Tasmanian Government would continue working with Saputo to find a new corporate suitor for the business, the largest single employer on King Island.

“Saputo’s decision to exit King Island next year is extremely disappointing,” Mr Rockcliff said on Twitter/X.

“We are deploying immediate support to the company’s workers, farmers, and the wider island community, including a dedicated response team.

“We’re going to keep working with the company to try and find a new operator for this iconic dairy.”

The office of Tasmanian Primary Industries Minister Jane Howlett was contacted for comment.

King Island Council mayor Marcus Blackie told The Weekly Times he had spoken to Premier Rockcliff about the next step forward for the Bass Strait isle.

“I pray there may still be a way for our historic dairy to survive. Either way we will get through this together,” Cr Blackie said.

“I have spoken to Saputo today, also the Premier who pledged the generous support of the State Government through this challenging period.

“Any company that has admired King Island Dairy from afar, now is your final chance to acquire this industry legend that does not deserve to be retired.”

EARLIER TODAY

King Island Dairy will close and the brand vanish from supermarket shelves, with dairy processor Saputo confirming it could not find a buyer for the Tasmanian brand.

More than 60 staff and farmer-suppliers on the Bass Strait island will be hit by the decision, coming at a time when the isle is also battling drought.

Saputo chief operating officer Leanne Cutts confirmed in a statement on Thursday that the Canadian processor would close the King Island processing site and retire the brand by mid next year.

Last year, Saputo announced a review of King Island Dairy to assess a range of commercial alternatives, including a potential sale to a third party.

“As King Island Dairy’s historic roots are deeply embedded in the region, it was hoped the strategic review would identify a potential buyer for the facility,” Ms Cutts said.

“It is a unique brand, with a plant that is nearly 100 years old and designed to produce handmade specialty cheeses.

“We have invested more than $40m in all our Tasmanian operations over the past five years.”

King Island Dairy was purchased by Saputo in 2019.

Ms Cutts confirmed the King Island closure would not impact other Tasmanian brands such as Mersey Valley and Tasmanian Heritage.

“King Island Dairy products hold a nostalgic place in the hearts of Australians (but) the brand has not maintained its position in today’s ultra-competitive food industry,” she said.

“This decision does not reflect the commitment of our hardworking and dedicated King Island employees and dairy farmers.

“The King Island community has done everything they can to support us and we will continue to work collaboratively with the Tasmanian Government.”

Saputo management confirmed “58 impacted employees” had been informed of the decision. “Where possible, (Saputo) will identify redeployment opportunities, and where alternative roles are not available, employees will be provided with their full entitlements and outplacement support,” management said.

Located off Tasmania’s northwest coast, King Island has a population of 1600 people with tourism, lobsters and beef the other sources of employment apart from dairy.