Bega Group is moving the production of the Betta Milk and Pyengana Dairy brands to its own factory in the Australian city of Hobart.
The move follows the company’s acquisition of a clutch of assets from fellow Australian group TasFoods last year.
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Until now, the production of the Betta Milk and Pyengana Dairy took place at a site in the Tasmanian town of Burnie.
The land and buildings in Burnie still belong to TasFoods subsidiary, Van Diemen’s Land Dairy Pty Ltd.
In a statement, Bega said the Burnie site was “an ageing facility that has a number of challenges including its safety and environmental impacts” and was unable to function “in a commercially sustainable way”.
Production will move to Bega’s site in Lenah Valley in Hobart, the Tasmanian capital, in March. Customer service and logistics will be integrated into Bega’s “existing supply chain”, it said.
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By GlobalDataBega’s other Tasmanian manufacturing site in Kings Meadows will continue to operate as normal, it said, “given the site’s unique capabilities”.
Some 62 employees will lose their jobs following the move, the company said.
The company said it is providing affected employees with “redundancy packages, and exploring redeployment opportunities.”
In a statement, Pete Findlay, Bega’s CEO, said the move was “not an easy one to make, and we are working hard to manage this change respectfully with all employees, suppliers, customers, and partners”.
He added that the company was “committed to continuing its strong local presence in Tasmania, through its Lenah Valley and Kings Meadows operations, sourcing milk from Tasmanian dairy farming families.”
The Australian Workers Union (AWU), which represents some of the affected workers, has described the news as “a big blow for dairy processing in North Western Tasmania.”
“The union’s strong preference would have been for Bega to update their infrastructure rather than rationalising the factory out of existence in the way that it has,” Robert Flanagan, Tasmanian assistant branch secretary for AWU said in a statement.
“The Betta Milk operation has had a footprint in Burnie for 70 years and has been a part of the fabric of that community over those years so it’s devastating the factory will be closed.”
According to Flanagan, the AWU held talks yesterday (19 February) about possible employment opportunities with dairy groups Saputo and Fonterra, which both have production sites in Tasmania.
“Both companies have been supportive of seeing what they can do to place Betta Milk workers within their respective operations”, he said.
The AWU confirmed to Just Food today (20 February) that negotiations were still ongoing.
