Philip Morris will stop making cigarettes in Australia, leaving 180 people out of work and others "delighted" the industry is waning.
The tobacco giant will close its Melbourne plant before the end of the year, ending 60 years of Australian manufacturing of a product now considered both highly addictive and harmful for users.
The company pointed to regulations which curtailed its ability to find new export markets for Australian-made cigarettes, in the face of a long-term and gradual decline in domestic demand.
Philip Morris' regional managing director John Gledhill said the 2010 introduction of reduced-fire risk requirements for Australian cigarettes had resulted in products that did not match consumer preferences in other markets.
"Despite the introduction of plain packaging and the continued growth in illicit trade, PML's volumes were stable in 2013," Mr Gledhill said in a statement on Wednesday.
"However, with any significant export opportunity restricted by Australian government regulations, our Moorabbin factory is significantly under-utilised, operating at less than half of its currently installed capacity.
"Regrettably, factors beyond our control prevent us from fully utilising the facility, and accordingly it's been identified for closure."
When Philip Morris opened its Australian operations in Moorabbin in 1954, it was the first site outside the US to manufacture the company's cigarettes. This production will soon be transferred to Korea.
"This is an extremely difficult decision, and devastating news for all of our employees," Mr Gledhill said.
"Philip Morris Limited has a proud history of nearly 60 years of manufacturing in Moorabbin ... and many of our employees have been with the company for a significant part of that journey."
Approximately 180 manufacturing-focused jobs will be shed to reduce Philip Morris' Australian workforce to about 550.
Deputy Opposition Leader Tanya Plibersek, a former health minister, said she felt sorry for the workers who will lose their jobs.
"But, if the reason that a cigarette company is losing business is because people are smoking less, I've got to say I'm delighted by the fact people are smoking less. Smoking kills half of all regular smokers," she said.
Australian Industry Group CEO Innes Willox said Philip Morris was another victim of the high cost of energy and labour in Australia, and the high dollar.
"Forcing Australian manufacturers to meet stringent regulations that impact not only their domestic footprint but also their competitiveness in export markets will put them at a disadvantage in markets where similar regulations don't apply," Mr Willox said.
The Australian Workers Union said it would work with Philip Morris in a bid to identify retraining opportunities.
