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Nestlé pushes back closure of Tongala dairy operations to meet demand

Photo source: Paul Jeffers

Nestlé will delay the closure of the Dairy section of the Tongala factory until early 2021, to ensure products remain on supermarket shelves for consumers during the coronavirus outbreak.

In August 2019, the company announced that it would close the Victorian factory, which produces tinned milk products, due to a diminishing market and cheaper imports.

“People just don’t buy tinned milk like they used to, and cheaper imports have eroded our business further,” Nestlé general manager Andrew McIver said at the time.

The Dairy section was initially set to close in Q2 2020 while the smaller Health Nutrition section was due for closure in 2021, but now the closures will be “more closely aligned”.

“It’s important that we make sure our products are available in store for consumers. To do this, we will maintain production at Tongala until early next year, while introducing products from other factories more gradually,” McIver said.

“We remain focused on minimising the impact of the change on employees and supporting them as they plan for the future. Workers who have already been offered jobs in other companies will be able to take up those offers and leave with their full redundancy entitlement.”

Nestlé said, however, that the reasons for closing the Tolonga factory remain.

The company said the investment needed to replace old equipment and improve sales, was not viable in the long term.

Eligible employees have been given extensive support to find alternative work. The FMCG giant is also working with other local employers, employment agencies, the Government and other organisations to explore alternative job opportunities.

After the closure of the Tolonga factory, the site will be sold.

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