In short:

Residents say the small Tasmanian community will be devastated by the closure of its biggest employer, the King Island Dairy, which is reminding some locals of the 2012 shutdown of the island’s abattoir.

The dairy’s owner, Canadian giant Saputo, said compared to its other Tasmanian brands, King Island Dairy had “not maintained its position in today’s ultra-competitive food industry”, with one industry expert saying the business was based on a “flawed model”.

What’s next?

Locals fear the loss of jobs will devastate the island’s community and result in people leaving.

There is sadness on the streets of King Island this week, but also a sense of déjà vu.

A familiar feeling swept the island as news broke that the community’s biggest employer, the King Island Dairy, would be shut down by its Canadian owner, Saputo.

The company made the announcement on Thursday afternoon, signalling its intent to retire the beloved brand and put nearly 60 employees out of work.

It said while the company’s other Tasmanian brands, such as Mersey Valley and Tasmanian Heritage, were “thriving”, the King Island Dairy brand had “not maintained its position in today’s ultra-competitive food industry”.

“This decision does not reflect the commitment of our hard-working and dedicated King Island employees and dairy farmers. The King Island community has done everything they can to support us and we will continue to work collaboratively with the Tasmanian government,” Saputo said.

The closure is akin to the 2012 shutdown of the island’s abattoir, which was also owned by a multinational — Brazilian company JBS — and also heavily affected the community as it employed more than 100 people.

‘It’s going to really knock the island around’

“Devastating” is the word being thrown around by many people affected by the dairy’s closure, both on mainland Tasmania and the island itself.

“It’s going to devastate the island,” said farmer David Munday.

He said it was likely a lot of the younger workers at the factory would have to leave the island to find work.

“They lose their jobs: We lose population with the island. That’s where it becomes devastating,” Mr Munday said.

King Island Hotel publican John Smith has called the island home for 30 years and said the dairy shutdown would have ripple effects across the whole community.

“It’s going to affect everything,” Mr Smith said.

“I could see it affecting the whole island’s schools … it’s going to have a knock-on effect to the football, the netball … it’s going to really knock the island around.”

Mr Smith said when the abattoir shut down it took the island about four years to recover, and that morale did not improve in the community until the now-celebrated golf courses began attracting new tourists.

“We certainly had quite a few years where we were getting on top of things and everyone was looking positive about going forward,” he said.

“So this has just been another kick in the rear.”

Challenging doing business on Bass Strait island

Both men agree that King Island, which sits off the north-west tip of Tasmania, is a difficult place to operate a business, due to the high costs associated with freight on Bass Strait.

“It’s the joys of living on a remote, beautiful island,” Mr Munday said.

“I live here because I love it … but at the end of the day, our freight component is pretty dramatic for all businesses and every facet of life here on the island.”

Mr Smith said even the island’s own products were expensive there, as things like raw beef and dairy were sent elsewhere for processing and then shipped back for purchase.

For that reason, he said you would pay as much as $10 for 2 litres of milk.

“It is unbelievable. What can you do?”

Politicians begin offering support, but no solutions in sight

Liberal MP Guy Barnett said recent months and years had been very tough on King Island, and that the government was taking Saputo’s announcement “very seriously”.

“The premier [Jeremy Rockliff] is making it very clear that we’re working with Saputo to find other alternatives, to see if we can find another investor or two to continue the operations at King Island,” Mr Barnett said.

In a statement, Saputo chief operating officer Leanne Cutts said the company had attempted to find alternatives to shutting the dairy down, including finding a buyer.

But when asked what the government could do that the company had not already tried, Mr Barnett said the government would leave “no stone unturned” and that the economic development arms of the government would be involved.

“They’ve had a very good track record of attracting investment to Tasmania,” he said.

Labor leader Dean Winter said it was important that the government step in and offer whatever support it could.

“I want to see the jobs preserved, and I want to make sure we’ve got a strong future for King Island,” he said.

Their comments were echoed by federal MPs including Tasmanian senator Anne Urquhart and Braddon member Gavin Pearce.

“I have told the premier today he can expect my full support to get the very best outcome for King Island,” Ms Urquhart said.

Mr Pearce said it was a “monumental loss” for the island, but that he wanted to ensure the King Island Dairy branding and product line was maintained so a buyer could be found.

“We’re proud of [that brand] in Tasmania,” Mr Pearce said.

“We make the very best … and the King Island brand is synonymous with that.”

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