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French dairy group Lactalis will close its historic South Brisbane milk processing plant in July 2026, consolidating production into fewer, more modern facilities as it reshapes its Australian manufacturing network following a string of acquisitions.
The closure of Queensland’s largest and oldest milk factory will affect 202 employees, but the company said milk supply from local farmers would continue uninterrupted, with volumes redirected to its Nambour facility on the Sunshine Coast, which is set to undergo upgrades.
Lactalis Australia chief executive Mal Carseldine said the decision was driven by efficiency and infrastructure constraints rather than a pullback from the Australian market.
“Our South Brisbane site has a long history, but its location and infrastructure no longer align with the requirements of a modern, efficient manufacturing network,” Carseldine said in a statement.
Processing currently undertaken at the inner-city Brisbane site will be reallocated across Lactalis’ Queensland and interstate operations, making greater use of what the company described as 'fit-for-purpose' assets.
The move follows the closure of Lactalis’ Rockhampton dairy plant last year, which resulted in 47 job losses, and comes as the group continues to integrate Fonterra’s Australian operations, acquired in a AUD 3.4 billion ($2.2 billion) deal that made Lactalis the country’s largest dairy company.
Lactalis has pledged more than AUD 200 million in capital expenditure to modernise its Australian manufacturing base through 2025-26, positioning fewer, larger plants to service national demand amid rising costs and tightening margins across the dairy sector.
The company said the South Brisbane closure would not affect farmers’ contracts or national milk supply, despite Queensland already trucking in milk from southern states to meet domestic demand.
The South Brisbane factory, which opened in the 1930s and sits on a prime riverfront site between major transport corridors, is expected to attract redevelopment interest as Brisbane accelerates urban renewal projects ahead of the 2032 Olympic and Paralympic Games.
Lactalis owns several of Australia’s leading dairy brands, including Pauls Milk, Ice Break iced coffee, Oak, Vaalia yogurt, Tamar Valley and Lemnos cheese. The company said the closure does not signal reduced investment in Queensland or Australia more broadly.
According to a report from ABC News, union representatives were “very disappointed” by the announcement and would be seeking assurances around redundancy and transition support for affected workers.
