Bega Cheese has announced it will close down one of its ageing Tasmanian liquid milk factories, after a challenging financial year with declining milk volumes.
It is believed Bega has identified too many upgrades required on the factory since it took over the northern Tasmanian Betta factory and brands last year.
Almost 50 northern Tasmanians will lose their jobs.
Bega bought the company from TasFoods Limited in an $11 million deal.
On February 19, Bega announced the Burnie Betta Milk factory would close, and move operations to its existing facility near Hobart..
The announcement was a blow for dairy processing in north-west Tasmania, said the Australian Workers Union, which represents the workers.
“The union’s strong preference would have been for Bega to update their infrastructure rather than rationalising the factory out of existence in the way that it has,” AWU representative Robert Flanagan said.
“The Betta Milk operation has had a footprint in Burnie for 70 years and has been a part of the fabric of that community over those years so it’s devastating the factory will be closed,” Mr Flanagan said.
“The workforce at Betta Milk has a very discrete skill set, and the union has held discussions today following the announcement with Saputo, who have a factory in Burnie, and Fonterra who have a factory in nearby Wynyard, to explore employment opportunities at their operations.
“Both companies have been supportive of seeing what they can do to place Betta Milk workers within their respective operations.”
Bega suffered an after tax loss of $229 million last financial year.
Last year Bega indicated it was intending to “right size” some of the company’s assets.
“The continued decline of milk production in Australia and excess milk manufacturing capacity has created a highly competitive milk procurement environment and a disconnection between returns received from internationally traded commodity markets and Australian farm gate milk price,” the company said last year.
The Bega Group’s statutory earnings before interest and tax was $144.1 million with a loss after tax of $229.9 million.