A major dairy factory will close in northern Victoria within 18 months with its owner citing a downturn in demand for tinned milk.
More than 100 workers will be made redundant as part of the closure after Nestle announced on Wednesday it would close its Tongala factory in the state's Goulburn Valley.
In a statement, Nestle general manager Andrew McIver said the closure was not a reflection of the company's staff, but a decline in demand and outdated equipment.
"People just don't buy tinned milk like they used to, and cheaper imports have eroded our business further," Mr McIver said.
"At the same time, the equipment in this factory is old, and the investment we need to make sure it can operate reliably in the future means that the factory is no longer viable."
The company said the closure would be staged progressively over a period of up to 18 months, with 106 workers at the factory to be made redundant.
Nestle said it had attempted to improve the viability of the factory in recent years, adding a new range of products including producing Maggi culinary products and Milo Ready to Drink.
"These ranges have supported the factory, but as milk is the bulk of what the factory makes, the newer ranges aren't enough to maintain manufacturing at the site," Mr McIver said.
Nestle said the factory was expected to close between late 2020 and mid-2021, with operations outsourced to Nestle factories overseas.
The company said it would support its workers to find alternative employment.
Nationals leader Peter Walsh said the closure was "devastating news" for Tongala.
"It will be an extremely difficult time for workers and their families as they face the reality of the next 18 months," Mr Walsh said.
"In a small, close-knit community like Tongala, the loss of so many jobs will have far-reaching consequences including on local sporting clubs, spending in small businesses and enrolments at the local school.
"This comes on top of industry pressures that have forced dairy farmers to leave the land and the socio-economic consequences of water leaving the Goulburn-Murray Irrigation District."
Nestle said it would sell the Tongala factory after its closure.
