Bega has long been one of Australia’s favourite companies when it comes to cheese and spreads, but the iconic brand announced on Wednesday morning that it would be shutting down its Coburg site in Melbourne.
While an array of Aussie businesses have shut up shop in recent times due to a lack of demand, Bega said it was actually Australia’s love of cheddar and mozzarella and the location of the factory that was behind the decision to close down the site with immediate effect.
“The decision to close the site was made following a review of our network which concluded that the Coburg site’s capacity and city location cannot viably support Bega’s expected future growth,” Bega said in a statement released by the ASX.
Bega said some staff would be offered employment at other Bega sites, but that there would also be redundancies.
“The priority at this time is to support our employees,” Bega said.
The company elaborated why the Coburg site – located in the north of Melbourne – was not part of Bega’s long-term future of the organisation.
“The facility is in a difficult location in metropolitan Melbourne and the capacity to expand or improve efficiencies at the plant was limited given its location and foot print and it was therefore concluded that business objectives and product supply requirements could be met more efficiently by rationalising our manufacturing network and closing our Coburg facility,” Barry Irvin, Executive Chairman of Bega Cheese Limited, said. “We of course recognise that Coburg has been an important part of our growth for the past decade and appreciate the wonderful effort and important contributions staff at Coburg have made to the business.”
Bega originally acquired the facility in 2009, using it to manufacture cheese for Bega’s private label and food service cheese business. Production of the goods will simply continue in other factories.
“Bega will continue to develop its domestic and international cheddar and mozzarella cheese business, sourcing cheese from Bega’s other dairy sites and toll manufacturing arrangements,” the company said.
Bega is expected to make a decision regarding the full exit from the site soon. And, despite a “very challenging first half” of the financial year, the company reported a revenue increase of 6 per cent.
The closure of the Coburg is just the latest in a series of factory shut downs in Australia in recent years – leaving many Aussies without jobs. In 2017, Coca-Cola Amatil announced its plan to close the South Australian Thebarton plant by 2019, moving its operations to Queensland and Western Australia.
“We need to modernise and invest in new capability across our supply chain to maintain our competitiveness in the market,” Alison Watkins, Coca-Cola Amatil Group Managing Director, said at the time.
Around 180 employees and contractors were affected by that decision.
Also in 2017, Holden ceased all production in Australia, signalling an end to car production in the country. Any Holden car bearing the Holden lion badge from 2018 onwards was built overseas.