Supermarket brand discount cheese has been the final nail in the coffin for Murray Goulburn’s Kiewa factory, says union

SHOW OF SUPPORT: Agriculture and regional development Minister Jaala Pulford speaks with media at Tangambalanga. Picture: MARK JESSER
SHOW OF SUPPORT: Agriculture and regional development Minister Jaala Pulford speaks with media at Tangambalanga. Picture: MARK JESSER

Supermarket brand discount cheese has been the final nail in the coffin for Murray Goulburn’s Kiewa factory, says the union representing soon to be out-of-work factory staff.

Fifteen months ago Murray Goulburn announced it had entered into a five-year national private label contract to supply Coles brand Australian cheese. In 2014 the co-op signed a 10-year deal to supply milk for Coles private label brands in Victoria and NSW.

The national dairy giant invested $91 million to upgrade its Cobram site to accommodate the Coles cheese deal, with production coming online in recent months.

However, Murray Goulburn’s retrospective farm gate milk price cut and doomed clawback in April 2016 saw the co-op’s milk intake fall by 20 per cent.

The company posted a $31.9m loss for the first six months of the 2016-17 year.

The drop in milk supply also put pressure on the Cobram cheese operation.

“The big problem is the big guys, Coles and Woolies, again,” National Union of Workers North East organiser Neil Smith said this week, “their demands on Murray Goulburn’s Cobram site are incredible.

“The struggle they had to get that plant up and running, the extra resources they had to put in there because of the demands of Coles to supply cheap cheese are just immense and this is the result. When you talk to people they say the dollar milk is not really the problem, it’s the cheap cheese. This is the big impact.”

On May 2, Murray Goulburn said it would close three factories, including the Kiewa operation at Tangambalanga and North East milk will be transported to Cobram.

Mr Smith made the comments after Victoria’s Minister for Agriculture and Regional Development Jaala Pulford met workers at the Kiewa factory on Tuesday.

Her visit was a day after more than 100 people attended a public meeting in Tangambalanga to discuss the impact of Murray Goulburn shutting the factory.

She said the government would leave no stone unturned in trying to find the best outcome for workers.