Nearly 100 Victorians will lose their jobs when dairy giant Fonterra shuts its factory in the state's southwest, blaming drought and low milk supply.
The New Zealand-based processor says the plant at Dennington, which opened in 1911, is no longer viable and its 98 workers will be out of a job later this year.
"This is not a one-off for this season, it's the new norm for the Australian dairy industry and we need to adapt," Fonterra boss Miles Hurrell said in a statement on Thursday.
"With the reduced milk pool in Australia, we must put it into our highest returning products and most efficient assets.
"Dennington is over 100 years old and not viable in a low-milk pool environment."
The National Union of Workers says employees were told on Wednesday they wouldn't have jobs after the end of November.
"It hasn't really hit home yet," the site's union delegate, Frank Kelly, said on Thursday.
The workforce had been expecting bad news since October, when the plant stopped producing a Nestle product for export, he added.
"Once that decision was made ... we were always in a bad position ... we were down to probably 30 or 40 per cent capacity."
Mr Kelly said the Dennington closure would have a huge impact on the small community near Warrnambool.
"There's sponsorship, there's different stuff the factory provides that won't be there. So it'll definitely affect the community, and the uncertainty about the site, what's going to happen to it, that sort of thing."
But the union's Victorian secretary, Susie Allison, has suggested that when milk supply picks up, there could be a future for processing at the Dennington plant, either under the management of Fonterra or a new buyer.
"We want to see a commitment that when milk supply picks up that our members will be first in line to come back and work and receive decent pay and conditions and secure union jobs," she said.
In the meantime the union said it would try and and get some of the Dennington workers redeployed to another Fonterra site at Cobden, about an hour east.
