There had been reports the Tasmanian government could nationalise the company in order to keep the 120-year-old Australian brand going. The government has denied this but it has nonetheless been piling the pressure on.

“We do not call out this behaviour lightly, but we will not stand idly by while a global company welshes on its responsibility to work with the government for the benefit of Tasmania,” Tasmanian Liberal Premier Jeremy Rockliff told The Australian.

The drama surrounds King Island Dairy, whose bries, creamy camemberts and sharp cheddar cheeses are stocked in supermarkets across Australia.

In 2019, Canadian cheese and dairy giant Saputo bought King Island Dairy and combined it with its existing Australian operations which also included Cheer, Devondale, Liddell’s and Mersey Valley cheeses.

But in September, Saputo announced that King Island Dairy would no longer operate from mid-2025.

The diary employs 58 people and is the single biggest employer on the island which only has a population of 1600.

The Montreal based firm said it made the decision to retire the brand after it was unable to find a buyer.

At the time Saputo Dairy Australia (SDA) president Leanne Cutts said the decision to close the brand “had not been taken lightly”.

“After thoroughly reviewing every possible option, closure of the facility was determined as the most viable way to strengthen SDA’s competitiveness based on changing industry and market conditions,” Ms Cutts said.

‘Increasingly concerned’

However, the Tasmanian government suspects Saputo hasn’t tried hard enough to sell off King Island Dairy as a going concern and is instead determined to close it down and remove a potential competitor from the market.

It said last week that it was “increasingly concerned,” Saputo wasn’t committed to the process.

Saputo brands such as South Cape and Tasmanian Heritage sell similar products to King Island Dairy and might benefit if there were less brands in the market.

The government said Saputo’s preferred buyer only wanted to buy one of King Island’s two dairy farms and that raised questions about how long a smaller operation would remain feasible.

Tasmanian Senator Jacqui Lambie has also been critical of Saputo’s antics.

“We see time and time again multinationals, god damn them, buying into our Tasmanian companies … only for them to turn their backs on the locals before much longer,” ABC reported her as saying.

Now, the Tasmanian Government has said it could make further moves to restart the sale process.

“All options are on the table to ensure the best outcome for the King Island community and to support the continuation of King Island Dairy’s operations,” Mr Rockliff said.

“Government has sought legal advice on a range of options available to ensure the best outcome is secured.”

Mr Rockliff believes the right buyer could ensure the long term survival of the premium cheese business. That would save a Tasmanian brand seen across Australia as well as keeping a vital employer on the island.

The threat appears to have had some impact with Saputo apparently re opening negotiations with potential buyers.

“I’m pleased that Saputo has listened to our concerns and re-engaged other interested parties, as is the common sense thing to do,” Mr Rockliff said in a statement to news.com.au.

“We will continue to work with Saputo to secure a new owner who values the brand’s legacy and importance to King Island and Tasmania.

“The priority remains to secure a buyer who will be committed to on-island production and support local jobs”.

News.com.au has contacted Saputo Dairy Australia for comment.

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