Saputo Dairy Australia, a subsidiary of global dairy giant Saputo Inc, has finalised the sale of its King Island Dairy operations to newly formed entity King Island Dairy 2 Pty Ltd, led by Australian investors with supply chain and manufacturing expertise.
The transaction, set to close by mid-2025, marks a strategic pivot for Saputo Dairy Australia as it streamlines its portfolio to focus on domestic and premium export markets.
As part of the agreement, impacted employees will receive an offer to transfer their employment to the new owner to help support the future of King Island Dairy, which is renowned for its cheese products.
The sale concludes a six-month search for alternatives after Saputo Dairy Australia’s September 2024 closure announcement sparked concerns about regional economic impacts. Tasmania’s government, which collaborated closely with Saputo during negotiations, hailed the resolution as a “win for agricultural retention”.
Industry analysts note the move aligns with Saputo Inc’s broader strategy to optimise its AU$3.4 billion Australian operations amid shifting global dairy demand. Saputo Dairy Australia retains control of flagship brands like Devondale and Great Ocean Road, which accounted for 62% of its 2024 export revenue.
Gerard Lourey, Saputo Dairy Australia’s director of operations and supply chain, said: “We are very pleased to have reached a sale agreement for the buyer to purchase the King Island Dairy facility and brand, the onsite Cheese store and two local farms that provide a guaranteed milk supply.”
“We deeply appreciate the ongoing support of our dedicated King Island employees, suppliers, customers, the local council and Tasmanian government during this challenging period for King Island Dairy. We thank them for their patience, resilience and collaboration.”
He continued: “While King Island Dairy will not be part of our portfolio moving forward, Saputo Dairy Australia remains committed to further growing the value of our domestic and premium export products as part of our long-term success in Australia”.
King Island Dairy 2 Pty Ltd is backed by Australian businessmen Graeme Wilson and Nick Dobromilsky.
Wilson has extensive experience in manufacturing and supply chain management through his family-owned business, Garden City Plastics Group, and as the former owner of The Décor Corporation, which supplied products to Woolworths and Coles. The pair also own Olympus Cheese, Queensland’s largest Mediterranean cheese manufacturer. It is believed that Dobromilsky plans to take the lead in managing the business.
The acquisition includes the full transfer of King Island Dairy’s factory, brand, and intellectual property, as well as the Burnie-based Heidi Farm, its brand and intellectual property. While financial terms remain undisclosed, regulatory filings suggest plans to modernise infrastructure while maintaining the brand’s artisanal positioning. A formal buyer announcement is anticipated next week.
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