Kraft Closes Factory in Melbourne

Kraft Foods announced it is closing one of its two Melbourne factories, making 151 workers redundant. The food giant said in a statement on Wednesday it was closing its Broadmeadows biscuit plant because "manufacturing costs remain too high for the facility to remain sustainable within the highly competitive biscu

 Kraft Foods announced it is closing one of its two Melbourne factories, making 151 workers redundant.

The food giant said in a statement on Wednesday it was closing its Broadmeadows biscuit plant because "manufacturing costs remain too high for the facility to remain sustainable within the highly competitive biscuits category".

But union leaders representing workers at the factory slammed the company for not reinvesting in the country - Australia - that bought its products and supplied its profits.


The multinational will shift production of its dry biscuit brands to "a regional facility in China" while distribution within Australia will be contracted to a "third party logistics provider", it said.


The company has promised it will pay its workers all entitlements as well as a redundancy package and provide "career transition" support.


Jane Farrell, assistant branch secretary of the Liquor Hospitality and Miscellaneous Union which covers production workers at the plant, said Kraft should have warned workers and made redundancy preparations well before Wednesday's snap announcement.

The food giant had taken over local biscuit manufacturer Lanes which previously owned the Broadmeadows operation.

But 12 months ago it began building a biscuit factory in China to replace its Melbourne operation, she said.

"A very wealthy, large multi-national moves in, takes over in recent years and guts the place and puts everyone on the dole queue," she said.

"It's about recognising the contributions those workers make to the success of that company and the profits of that company and the pay packets of those bosses.

"The only reason it's cheaper to make it in China is they don't pay award or minimum standards, there's poorer health and safety.

"We've got grave concerns about what conditions those people in China work under."

Maintenance workers at the Broadmeadows factory are represented by the Australian Manufacturing Workers Union. Its state president, Chris Spindler, accused Kraft of abandoning its responsibility to "reinvest in the society that buys their products".

"If we just fall into the argument of saying `Well, labour is cheaper in China than Australia' well, we might as well pack up everything now," he said.

Instead governments - both state and federal - should show more support for the manufacturing sector by investing in research, development and infrastructure, just as the Chinese government did, he said.

Victoria's Acting Premier John Thwaites said his government would help the retrenched workers look for other manufacturing jobs in the area.

More in Home