Lactalis plans to close dairy factory in Gippsland, ADF comments

Australian Dairy Farmers (ADF) has said the news that dairy business Lactalis plans to close its Longwarry factory in Gippsland, Victoria by the first quarter of 2027 reflects the mounting pressures facing Australia’s dairy industry.

During the ACCC’s assessment of Lactalis’s acquisition of Fonterra, ADF raised concerns about increasing consolidation across the dairy industry and the importance of maintaining strong competition and regional processing facilities.

ADF President Ben Bennett said the announcement of the dairy factory closure plans reinforces why competition and processing capacity matter.

“Every factory that closes undermines dairy communities and makes the industry that little bit smaller,” he said.

As part of its restructuring plans, Lactalis indicated that the processing at the Longwarry factory will be consolidated with its Darnum facility and other processing plants.

“While this is a commercial decision by Lactalis, it is another reminder that Australia’s dairy industry is operating in an increasingly challenging environment,” Bennett said.

“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.

“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.”

While Bennett was first and foremost concerned about the impact that this decision will have on workers, their families and the local businesses that rely on the site, he said the dairy industry needs governments to start backing Australian dairy.

“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.

Image credit: iStock.com/jack191