The closure of Tasmania’s famous King Island Dairy will dent the local economy, local business leaders say, leaving the island’s popular golf courses to drive visitor numbers for tourism and hospitality operators.
Dairy industry giant Saputo on Thursday said its plan to sell the King Island Dairy operation to a third party had faltered, meaning the century-old operation will shut down.
The facility will close in mid-2025, Saputo said, resulting in the loss of 58 jobs at the company.
King Island Dairy was among the first major producers to bring Australian-made specialty cheeses to supermarket shelves nationwide.
Despite holding a “nostalgic place in the hearts of Australians, the brand has not maintained its position in today’s ultra-competitive food industry,” said Leanne Cutts, president and chief operating officer for Saputo’s international wing.
King Island Dairy is one of the single largest employers on the island, which sits 80 kilometres off the northwest tip of the Tasmanian mainland, and counts roughly 1,500 residents.
Its dedicated cheese shop is also a popular tourist site, known for its tasting menus and platters.
In a statement, Tasmanian Premier Jeremy Rockliff called Saputo’s decision to depart King Island “very disappointing”.
“We are providing immediate support to the company’s workers, farmers, and the wider island community,” he said.
Although Saputo’s hopes of finding a buyer fell through, the Premier has not given up hope of finding the dairy a new operator.
“We are also working with the company in an effort to find a new operator for this iconic dairy,” he said.
Greg Morris, a lifetime resident of King Island and vice president of its Chamber of Commerce, said the loss of King Island Dairy will be deeply felt.
“It’s one hit on top of quite a lot of others lately,” Morris tells SmartCompany.
Beyond the dairy, King Island’s small business sector is dotted with boutique hospitality providers, seafood producers, distilleries, and craft shops, along with several independent supermarkets.
Should King Island Dairy employees struggle to find work elsewhere on the island, the “flow on is going to be pretty horrific, as far as accommodation goes, and general throughput for our supermarkets”.
The independently-owned dairy farms that supply some of King Island Dairy’s milk could be significantly affected, along with their workers and business partners.
“Those properties also employ quite a few people: backpackers, major contractors that put their fertiliser on do their pasture work,” Morris says.
“So there’s going to be quite a big impact on smaller businesses that work for those dairy farms.”
In addition, the disappearance of the King Island name from supermarket fridges nationwide is concerning, Morris says.
“I guess it’s one of the pillars of our tourist industry.
“It’s cheap advertisement. It’s part of how we keep our presence noted in Australia.”
The island, also known for its cattle farming, also lost its primary meatworks in 2012; while a new facility has opened, Morris says much beef grown on the island is processed under different brand names, reducing its name recognition.
In his statement, Rockliff said the government will work with community members hit by the dairy’s closure.
“We have established a response team which will work with the King Island community and business leaders to support local businesses, workers, and families through this period,” he said.
One factor buoying King Island’s status as a getaway location is the golf course Cape Wickham Links, which this year earned the top spot in a prestigious ranking of Australian courses.
The course, less than a decade old, is now one of several drawing keen golfers from mainland Tasmania, continental Australia, and further abroad.
Much of King Island’s produce is now flown or shipped in, but Morris sees the popularity of those courses as a potential opportunity for local producers.
“If we could get some local industry, restaurants and home-grown products would be good, [but] once again, scale and operating costs are a big issue here.”
“Even though we’ve had a few hurdles, I still think it has great potential as a tourism destination and a place to make an income,” he continues.
“We need to make the most of people that come, and hopefully stay a little bit longer to make it work.”
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Senior Business Journalist
Focused on the small business sector, David’s work covers the political, regulatory, and economic issues facing Australian entrepreneurs. Prior to joining SmartCompany, he was a reporter for Business Insider Australia. You can follow him on LinkedIn.
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