Dairy company Fonterra will close its western Victorian factory, shedding nearly 100 jobs.
The New Zealand-based processor says its Dennington plant, opened in 1911, is no longer viable and will be shut down later this year.
“The Australian ingredients business continues to feel the impact of the drought and other significant changes that mean there is excess manufacturing capacity in the Australian dairy industry,” Fonterra boss Miles Hurrell said in a statement on Thursday.
“This is not a one-off for this season, it’s the new norm for the Australian dairy industry and we need to adapt.
“With the reduced milk pool in Australia, we must put it into our highest returning products and most efficient assets. Dennington is over 100 years old and not viable.”
The company told workers about the closure on Wednesday, and in a statement to milk suppliers reportedly outlined a November closure date.
Mr Hurrell said Fonterra’s top priority was to support its 98 employees at the Dennington plant.
The National Union of Workers hopes some of them can be redeployed to another Fonterra site at Cobden, about an hour east.
“There’s 1900 people that live in Dennington. So 100 people in that area is absolutely devastating,” the union’s Neil Smith told AAP.
“Really well-paid, long-term jobs, gone.”
The union hopes to meet with the company this week.
Mr Smith said operations at the plant had changed since farm-gate milk prices took a hit in recent years.
“It’s been very quiet down there … This is a product of their own doing. Back in 2017 Murray Goulburn and Fonterra did a big claw back on the farmers,” he said.
“Dairy farmers are leaving the industry … and there’s just not enough milk supply.”