Dairy company Lactalis Australia has announced it will close its Echuca factory, on the border of Victoria and New South Wales in northern Victoria, axing up to 70 jobs this year.

But the company says it will expand its operations in the larger regional centre of Bendigo, potentially creating new jobs at this site.

Lactalis announced today it would invest $85 million over three years to expand its manufacturing and supply chain at other Victorian sites.

Chief executive officer Mal Carseldine said in a statement the French-owned multinational company decided to shutter Echuca after a “detailed review” of its yoghurt and desserts division.

“The plan sees us have one regional hub in Victoria that is fully utilised,” he said.

He said the selection of the remaining milk factory took into account milk processing capability, operating costs, and site layouts.

“Based on this criteria, our Bendigo site was the most suitable option for us to invest in to meet our future needs in Victoria,” Mr Carseldine said. 

Mr Carseldine said the company was consulting with its Echuca team about the decision and how to best support workers through the transition.

He said the closure could impact approximately 74 employees and contractors.

“This is not a decision we take lightly,” Mr Carseldine said.

“For some employees, there will be opportunities for redeployment to other Lactalis sites and those opportunities will form part of the discussions with individual employees.”

He said the investment, much of it focused on Bendigo, would see more jobs, a new production line, and more yoghurt and custard capacity established at the Bendigo site.

Local MP devastated

Victorian Nationals leader and member for Murray Plains Peter Walsh said he only found out about the closure on Tuesday night when the company emailed him about it following a meeting with Echuca staff.

He said he was devastated on behalf of the workers and the community.

“The questions I will have for the CEO when I talk to him next week will be ‘Why did you not invest that money in Echuca? Why invest it in Bendigo?'” Mr Walsh said.

“They have had a strong presence in Echuca for a long time — a great place as I understand it [with] a very loyal workforce there.

Seven dairy processing facilities have closed since August 2022 including Bega’s Betta Milk factory in Burnie earlier this year and consolidating its sites in Launceston and Kings Meadow, and last year Saputo closed its Maffra factory.

Union shocked

Australian Manufacturing Workers’ Union organiser Chris Spindler said they had heard rumours that the site would be closed but said the announcement was still shocking.

Mr Spindler said the factory had been a prime site for the company with state-of-the-art machinery used on site.

“We don’t fully understand the rationale behind [the closure decision],” he said.

“We prefer that they sat down and spoke to us at length before making that announcement to give us their concerns and to see what could be done in terms of saving the site.”