A Liberal Premier is open to nationalising one of Australia’s oldest and best known and loved cheese makers if its foreign owner fails to agree its sale to a suitable buyer.
The iconic King Island Dairy could be temporarily nationalised by the Tasmanian government or legislation passed to force its foreign owner to make a fair sale to a private buyer.
Canada-based Saputo has announced the closure of the famous 122-year-old Australian dairy from mid-2025 and was last week accused by the state government of shunning legitimate sale options.
The multinational has since re-engaged with potential bidders, but concern remains within the community that the company may prefer to see the dairy close permanently and not pass to a competitor.
Tasmanian Liberal Premier Jeremy Rockliff told The Australian he would if necessary consider special legislation to force Saputo to make a fair sale of the assets – or to temporarily nationalise them for on-sale.
“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’s minority government has been working with the dairy and has identified potential buyers, but last week accused Saputo head office in Toronto of not being committed to the process.
“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,” he said.
On Monday, he sounded a more positive note, saying Saputo “has listened to our concerns and re-engaged other interested parties”. “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,” Mr Rockliff said.
“The priority remains to secure a buyer who will be committed to on-island production and support local jobs.”
Cheeses in the mould-growing phase at King Island Dairy on King Island.
There is significant public support to rescue the dairy, which employs 58, making it the island’s single biggest employer.
It is of vital importance to the island community and economy, and has built a reputation as one of Tasmania’s best and oldest premium brands.
Key products, including its soft cheeses and unique smoked cheddar, are renowned nationally.
Mr Rockliff, a farmer whose own electorate of Braddon takes in the dairy, said the government had provided “targeted support” to lure buyers, bringing “several interested parties to the table”.
While Saputo had publicly expressed an intention to sell the business, the government last week became “increasingly concerned” its HQ did not intend to follow through, although it appears the company has now re-engaged.
Some industry analysts back the government’s belief that the dairy is a desirable, premium asset capable of being made a going concern by a new owner.
The government has said Saputo chose from a shortlist of potential buyers a company that only wished to purchase one of the two dairy farms.
This would have led to a significant drop in production and jobs and the government held concerns about the long-term sustainability of such a smaller operation.
Saputo did not respond to a request for comment. When announcing the closure in September, its international president, Leanne Cutts, suggested the King Island brands were no longer competitive and the infrastructure too old. “It is a unique brand, with a plant that is nearly 100 years old and designed to produce handmade specialty cheeses,” she said.
King Island Dairy Furneaux cheese
“We have invested more than $40m in all our Tasmanian operations over the past five years. While our other Tasmanian brands, such as Mersey Valley and Tasmanian Heritage are thriving, and King Island Dairy products hold a nostalgic place in the hearts of Australians, the brand has not maintained its position in today’s ultra-competitive food industry.”
King Island lost more than 100 jobs when Brazilian-owned JBS closed its abattoir in 2012.
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