The ABC has reported that one of Australia’s largest dairy processors, Lactalis Australia, plans to phase out manufacturing at its Longwarry dairy factory, before shutting down the site in the first half of 2027.
The company announced plans to acquire the facility for $67 million in December 2014, under its former name Parmalat. It currently employs 53 permanent staff and a number of casual workers. According to the ABC, Lactalis has made the decision to close the site following a review of its manufacturing network.
Lactalis brands include Pauls, Oak, Ice Break, Oak, and Jalna – with the company’s acquisition of Fonterra’s consumer business for almost $3.5 billion last August adding Mainland and Western Star to the list. The sale was completed in April.
The Fonterra acquisition included facilities in Victoria, which already houses the bulk of Lactalis’ operations, with the company’s new Darnum site located just 20 minutes from Longwarry.
Lactalis told the ABC that Longwarry operated at around 40 per cent capacity, while Darnum operated at around 70 per cent capacity. Lactalis Australia CEO, Mal Carseldine, said the company does not underestimate what this closure means for our Longwarry team and their families.
“Our employees have contributed meaningfully to our company and the region, and they have our commitment to support them through this transition,” Carseldine told the ABC.
“Our priority is to ensure a respectful and transparent consultation process. Lactalis remains deeply committed to Victoria. Alongside Lactalis-Mainland Dairy, we employ more than 2000 people and continue to invest in manufacturing capability and regional communities.”
The decision follows the planned closure of the company’s South Brisbane site, announced in January. Before the Fonterra deal, the company also closed its Echuca facility in 2024 – consolidating operations at its Bendigo site.
Australia’s dairy farmer representative body, Australian Dairy Farmers (ADF), said the decisions reflect the mounting pressures facing Australia’s dairy industry.
ADF president, Ben Bennett, said rising energy prices, increasing regulation, growing compliance obligations, escalating input costs and trade settings that expose Australian producers to heavily subsidised imports are steadily eroding Australia’s dairy industry.
“Today’s decision reinforces why competition and processing capacity matter. Every factory that closes undermines dairy communities and makes the industry that little bit smaller,” said Bennett.
“While this is a commercial decision by Lactalis, it is another reminder that Australia’s dairy industry is operating in an increasingly challenging environment.
“Governments cannot keep saying they support food security, sovereign manufacturing and stronger regional communities while making it harder and more expensive to make food in this country. Unless these underlying issues are addressed, Australia will continue to lose investment, dairy factories, jobs and, ultimately, dairy farms.
“No one wants to see more factories close or more dairy farms disappear from regional Australia. We need policies that strengthen the competitiveness of Australia’s dairy industry before more communities feel the impact. Today it’s one factory, but this should concern every Australian who wants to keep seeing fresh Australian dairy products on supermarket shelves and in their fridges,” he said.
