Iconic Tasmanian brand King Island Dairy to be sold off by foreign owners

It might be one of the prides of Tasmania, but King Island Dairy could soon be no more as its overseas owners have put the only dairy processing plant on the island up for sale.

The dairy itself has been operating on the island for over 100 years and the brand has been popular across the country since the 1980’s. Canadian dairy giant Saputo, which owns King Island Dairy, is also responsible for other Australian cheese brands like Devondale, Mersey Valley, and Cracker Barrel.

They announced on Wednesday that they were considering offloading its King Island business in order to reduce the cost of running its Australian network. King Island Dairy only became a part of Saputo in 2019.

According to Food and Drink Business, Saputo have enlisted MA Moelis Australia to look at a range of, “strategic, commercial, and financial alternatives, including a potential sale to a third party so the facility can continue to make its award-winning products for the long term”.

The decision to sell the dairy has thrown the future of the plant’s 63 employees into doubt as well. With a small population and relatively remote location, there may not be enough other jobs on King Island for them should a new buyer not be found.

The move comes as Saputo closes some of its other dairies across the country and is set to spend $27 upgrading existing plants across Victoria and Tasmania. Locals are less than surprised but it hasn’t stopped them from being concerned about the potential shutdown of one of the island’s biggest employers.

Dairy farmers, Bill and Kelly Lancaster spoke to the ABC about the slow decline of dairy on the island. There used to be thirty dairy farms but now the number had dwindled to only four.

“We’re one of only two family farms left,” Mrs Lancaster said.

The other two farms are owned by Saputo.

“It’s sad,” said Mr Lancaster, who is a third generation dairy farmer.

“When I came back to the farm after going away to school and working in Melbourne … the dairy industry was thriving. We’re not particularly surprised [about the sale], just because of the way everything’s been going over the last few years,” he explained.

King Island Mayor was similarly concerned by the decline of dairy on the island but he was optimistic that the brand could potentially be saved.

“My fervent hope is that the company as we know it … can be sold as a going concern to someone else who can overcome these current challenges, who can see the potential for the brand in the future because all Australians love it,” he said to the ABC.