A year of turmoil surrounding Murray Goulburn came to a devastating end on Tuesday when the dairy giant said it would shut its Kiewa factory at Tangambalanga.
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The Danone-Murray Goulburn operation on the site, which employed 68 people, was not affected.
“We had to take some difficult decisions and these decisions haven’t been taken lightly,” Mr Mervis said.
“We are acutely aware of the significant impact that it has on communities and the environments where they operate, particularly in those small communities.”
Mr Mervis’ first role since taking over from interim chief executive David Mallinson in February, was to review Murray Goulburn’s entire operation.
Industry speculation suggested the review would see the Rochester and Maffra plants closed while the Tangambalanga operation was expected to survive because of its yoghurt making partnership with Danone.
“It is quite important to stress that at Kiewa, the impacted facility is the Murray Goulburn facility and not the Murray Goulburn-Danone facility,” he said.
“It is totally independent, we have two site managers, two engineers, two of everything. It’s an evergreen joint venture. We own 50 per cent, Danone owns 50 per cent and together we manufacture, produce and sell all the Danone brands.”
Lost in Tuesday’s announcement was confirmation MG would drop its controversial claw-back of farm milk payments.
The Milk Supply Support Package – set up to recover money MG overpaid suppliers before it slashed its farm gate milk price 12 months ago – was widely condemned in the dairy industry and led many suppliers to leave the co-op.
That loss of supply was a factor in Tuesday’s shutdown announcement.
“The decision is bittersweet for lots of reasons,” Eskdale dairy farmer Karen Moroney said. “They’ve taken away the MSSP, that was absolutely vital.”
“When they put that MSSP on dairy farmers, that clawback as it was called, it had a devastating effect.
“With Kiewa closing it’s really tough for the people employed there … but our feeling as dairy farmers, for the survival and prosperity going forward the hard decision had to be made and this is a hard decision but generally we feel its the right decision.”
The Alpine Valleys Dairy Pathways Committee believed dairy would continue to have a strong future in the area after the announcement.
“This is the best place in Victoria to be in dairy,” president Stuart Crosthwaite said.
“We have excellent soil, reliable rainfall and high quality skills within the industry. This is a blow to our communities, but it isn't the end of dairy in the North East.”
Independent member for Indi Cathy McGowan, a vocal campaigner for the Alpine Valleys dairy sector, said the decision was disappointing.
“It is a terrible blow for Kiewa and the surrounding community, as well as for manufacturing in the region,” Ms McGowan said.
Victorian Agriculture Minister Jaala Pulford said she had assurances from Mr Mervis the company would look at redeployment options for staff if possible.
