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Saputo Dairy Australia (SDA) has announced that it will commence the final operating season of King Island Dairy, with plans to close the facility and retire the brand by mid-2025.

This decision follows an extensive strategic review aimed at maximising the business's value amid changing market conditions.

Over the past 10 months, SDA explored various options, including a potential sale of the King Island Dairy brand, but ultimately determined that closure was the most viable path forward.

Leanne Cutts, president and COO (international and Europe) at Saputo, stated that this decision was not made lightly, given the brand's deep historical roots in the region.

"While we hoped to find a buyer for the facility, the competitive landscape has made it increasingly difficult for King Island Dairy to maintain its market position," she said.

The facility, nearly 100 years old, is known for producing hand-made speciality cheeses that have nostalgic value among Australian consumers.

Despite investing over $40 million in its Tasmanian operations over the past five years, SDA noted that other brands such as Mersey Valley and Tasmanian Heritage are performing well, in contrast to the challenges faced by King Island Dairy.

Approximately 58 employees will be affected by the closure. SDA aims to identify redeployment opportunities within the organisation, and those unable to transition will receive full entitlements and outplacement support.

The company is committed to working closely with its employees, dairy farmers and the King Island community during this transition period.

The decision has drawn attention to the broader challenges facing the Australian dairy industry, which has grappled with competitive pressures, fluctuating consumer preferences and rising production costs.

As SDA continues to focus on its other brands and investments in North-West Tasmania, it remains committed to supporting the local economy and maintaining strong relationships with stakeholders, including the Tasmanian government.

SDA will consult with affected parties, including union representatives and the King Island Council, to discuss the implications of this decision and the support available during the closure process.

In the meantime, King Island Dairy will continue its operations, producing speciality cheeses as the company develops a transition plan.

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