LOCALS are concerned about potential moves to relocate the King Island Dairy brand, highlighting the unique qualities of the island’s cheese, which they believe are closely linked to the island’s milk and grass.
Saputo Dairy Division (Australia) announced last week its plan to launch a strategic review of King Island Dairy with an option of selling the business.
The announcement sparked worry and doubt among workers and locals regarding the brand’s future and milk processing on the island.
The move is part of Saputo’s strategy to cut operational expenses in its Australian network.
King Island Mayor Marcus Blackie hopes that the facility will be sold as a running business, safeguarding the brand and its cheese recipes. He stresses the factory’s importance to the local community and urges efforts to find a buyer who recognises the brand’s value.
Saputo Dairy Australia said: “While it is not appropriate to speculate or pre-empt the outcome of the review process, King Island Dairy’s historic roots are deeply embedded in the region, and we hope to find a buyer to ensure the continued success of its renowned specialty cheese products.
“That is why our review will consider a range of strategic, commercial, and financial alternatives, including a potential sale to a third party so the King Island Dairy facility can continue to make its award-winning products for the long term.”
Many islanders immediately recalled the emotional and economic impact on families and the wider island community when JBS closed the abattoir and moved the brand and facilities to their Tasmanian operations.
Primary Industries Minister Jo Palmer, in response to questions put to her by Independent Murchison MLC, Ruth Forrest told the Legislative Council the State Growth Department had been in discussions with Saputo for some time about a review into its King Island operations.
When asked by the Courier if Saputo intends to produce the King Island Dairy brands in Tasmanian facilities the company said: “There has been no discussion with the Department of State Growth about relocating production of King Island Dairy products to another facility.”
King Island Dairy, renowned for its celebrated cheeses, and the Burnie manufacturing facility was part of the “Specialty Cheese Business” of Lion-Dairy & Drinks Pty Ltd Saputo’s purchased for $280m in 2019.
Saputo Australia Pty Ltd is known for brands such as Devondale, Mersey Valley, and Cracker Barrel, and has assured that operations at King Island Dairy will continue as usual until they find a suitable buyer.
The company said the “timeline is flexible”.
Saputo aims to inject $27 million into its remaining sites in Tasmania and Victoria, underlining its commitment to the broader Australian dairy sector.
However, concerns have arisen regarding the impact on local employment, given that King Island Dairy is a significant employer on the island.
The number of dairy farms on King Island has significantly dwindled over the years, with Saputo now owning two of the remaining four.
Former dairy farmers on King Island recall the prosperous times of the cheese factory, which once processed millions of litres of milk from numerous farms.
Challenges faced by the island’s dairy industry over the past decade included decreasing milk demand, contract uncertainty, the elimination of specific product lines and the lure of a better lifestyle and returns that conversion to beef production offers.