French dairy giant Lactalis is set to cease operations at its yogurt and desserts manufacturing plant in Australia.

The company has announced plans to close its facility in Echuca, located in the state of Victoria, later this year. The closure is expected to affect approximately 74 employees and contractors associated with the plant.

Lactalis, the proprietor of the Pauls brand, intends to consolidate its local yogurt and desserts operations around a singular regional hub in Victoria, centred at a location in Bendigo within the same state.

The dairy behemoth is earmarking an investment of A$85 million ($56.3 million) over the next three years into its manufacturing and supply chain infrastructure across regional Victoria. This investment aims to augment production capacity and enhance the focus on environmental sustainability, technology, and automation within its operations.

Mal Carseldine, Lactalis’ Australian CEO, elucidated the company’s long-term strategy, stating: “Our long-term plan to meet future growth aspirations was made after a detailed review of our yogurt and desserts division. The plan sees us have one regional hub in Victoria that is fully utilised.”

He further explained the rationale behind the chosen site for investment: “Our selection of which site considered 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.”

Lactalis is currently engaging in consultations with the staff at the Echuca facility regarding the impending closure. “This is not a decision we take lightly. 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,” Carseldine added.

The decision has been met with criticism from the Australian Manufacturing Workers’ Union, with organiser Chris Spinder expressing concerns over the lack of clarity surrounding the decision to shut down the plant.

“We don’t fully understand the rationale behind [the closure decision],” Spinder conveyed to local news agencies.

He advocated for a more collaborative approach, stating: “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.”

In a separate development last year, Lactalis was subjected to a fine of A$950,000 (approximately $644,000) for infringing Australia’s dairy code of conduct during the 2020-21 milk season.

The legal action against Lactalis was initiated by the Australian Competition and Consumer Commission (ACCC) in July 2021, alleging violations of the Dairy Code of Conduct. In September 2022, the ACCC determined that Lactalis had contravened the code by not publishing milk-supply agreements on its website by the stipulated deadline of 2pm on 1 June 2020.


Sam Allcock, a seasoned entrepreneur with over two decades of expertise in Food & Drink Editorial.

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