Industry deregulation is to blame for the imminent closure of two Queensland dairy plants, according to their owner Paul's.

Gordon Armstrong, general manager of Paul's Queensland, revealed today that the two plants, n Mackay and Monto, would be closed due to a shortage of milk. Operations at another plant in Warwick will be cut back as the company focused on Rockhampton as the centre of its business.

Milk is harder to source after deregulation within the industry forced many dairy farmers out of business. In a statement, Armstrong commented: "Deregulation has placed pressure on everyone involved in the industry to remain viable."

Mick Prendergast, spokesman for the Dairy Farmers Organisation, argued that this move by Paul's is evidence of the crisis facing the Queensland dairy industry, and proof that government assistance is essential.

60 jobs are expected to go with the closure of the plants, but Armstrong stressed that transfers for the workers at Monto and Mackay would be offered where possible.