Dandenong South-based timber mill Dormit is planning to stand down 40 workers after running out of raw timber supplies.
While a global timber crisis has been fueled by bushfires, the pandemic and low imports, Plentarch Group, the owner of the mill, is blaming court injunctions that have put a stop to native logging in areas of East Gippsland and north-east Victoria.
The mill is Australia's largest producer of wooden pallets used by Coles, Woolworths and Aldi, and is preparing to cease production within days.
Dormit produces 70,000 timber pallets a month, and had reportedly cut production by one-third, with just days worth of timber remaining.
Shadow Agriculture Minister Peter Walsh said the pallet shortage could lead to "absolute chaos" for farmers.
"The crunch point for new pallets is because of court actions by anti-forestry activists stopping VicForest from harvesting timber, which is stopping the supply of raw materials," Mr Walsh said.
But Environment East Gippsland, one of the main groups taking cases to court against VicForests, has publicly refuted the comments that injunctions were responsible for timber shortages.
In October, Coles chief executive Steven Cain warned a critical shortage of pallets used in the freight of produce would threaten deliveries in the lead up to Christmas.
Sanders Apples owner Kevin Sanders, Three Bridges, said the cost of pallets had spiked 30 per cent in the last six months.
"About 12 months ago they were difficult to get and now they're impossible to find," Mr Sanders said.
"Some [suppliers] won't have them until June next year but by then the crop will be off the trees and on the ground if we don't have bins."
Transport and logistics giant Brambles, which operates a pool of 345 million pallets, crates and containers across 60 countries, is also scrambling to secure enough pallets.
Mr Sanders said many pallet suppliers refused to deliver containers unless exchange pallets were available.
Annabelle Cleeland
Annabelle Cleeland is a Stock & Land journalist. She has worked at Australian Community Media for more than a decade serving in a number of roles including editor, senior journalist and national sheep & wool writer. She runs a fine Merino wool property with her young family in North-East Victoria.
Annabelle Cleeland is a Stock & Land journalist. She has worked at Australian Community Media for more than a decade serving in a number of roles including editor, senior journalist and national sheep & wool writer. She runs a fine Merino wool property with her young family in North-East Victoria.
