French dairy heavyweight Lactalis is to close a yogurt and desserts plant in Australia.
Lactalis plans to shut the factory in Echuca in the state of Victoria this year with around 74 employees and contractors likely to be impacted by the move.
The Pauls brand owner is planning to have "one regional hub" in Victoria for its local yogurt and desserts business, which will centre on a site in the same state in Bendigo.
Lactalis is lining up an investment of A$85m ($56.3m) over three years in its manufacturing and supply chain across regional Victoria. The company said the spending will up capacity and "drive a greater focus on environment, technology and automation".
Mal Carseldine, the CEO of Lactalis' business in Australia, said: “Our long-term plan to meet future growth aspirations was made after a detailed review of our yogurt and desserts division. The plan sees us have one regional hub in Victoria that is fully utilised.
“Our selection of which site considered milk processing capability, operating costs and site layouts. Based on this criteria, our Bendigo site was the most suitable option for us to invest in to meet our future needs in Victoria.”
Lactalis said it is consulting with employees at the Echuca site. “This is not a decision we take lightly. For some employees, there will be opportunities for redeployment to other Lactalis sites and those opportunities will form part of the discussions with individual employees,” Carseldine said.
Australian Manufacturing Workers' Union organiser Chris Spinder was critical of the decision.
"We don't fully understand the rationale behind [the closure decision]," he told local media outlets.
"We prefer that they sat down and spoke to us at length before making that announcement to give us their concerns and to see what could be done in terms of saving the site."
Last year, Lactalis was fined A$950,000 (then $644,000) after being found guilty of breaching Australia’s dairy code of conduct in the 2020-21 milk season.
The company was initially taken to court by the Australian Competition and Consumer Commission (ACCC) in July 2021 over alleged breaches of the Dairy Code of Conduct.
In September 2022, the ACCC ruled Lactalis had breached the code when it failed to publish milk-supply agreements on its website by a deadline of 2pm on 1 June 2020.
