Lion to sack Bentley workers

Beverages giant Lion has confirmed about a third of workers at its Bentley milk processing plant will lose their jobs after the company was dumped as Woolworths' milk supplier in Western Australia for rival Brownes.

Woolworths last month announced a raft of new contracts for the supply of its private label milk, with Lion losing the right to supply milk to Victorian and Western Australian stores.

Brownes secured a seven-and-a-half year deal to supply milk to Woolworths in WA from July this year, while New Zealand dairy company Fonterra won a 10-year contract in Victoria from February 2015.

Lion said at the time that the decision would impact processing volumes at its Bentley milk processing plant.

A spokesperson for Lion today confirmed that 42 workers will be made redundant from July 1, reducing the plant's total workforce by about a third.

"While our branded business in WA continues to grow, and Lion remains committed to the WA market, it’s necessary to adjust the cost structure of the Bentley plant to ensure its efficiency and long term viability," the spokesperson said.

"We are supporting our people through the implications of this difficult but unavoidable change, exploring redeployment opportunities and, where necessary, redundancy payments and appropriate outplacement support.

"We will continue to work with all key stakeholders to ensure a respectful and smooth process at the Bentley site."

The loss of the Woolworths contract amounted to about 24 million litres, or 30 per cent of the Bentley plant's production volume, the spokesperson said.

The new supply arrangements are designed to ensure milk is kept in the state in which it is produced, especially in WA. 

"We no longer want to see milk shipped across borders, which only adds cost and increases the time between the farm and the supermarket shelf," Woolworths managing director Tjeerd Jegen said last month.

Lion retained contracts to supply Woolworths' private label milk in South Australia, Tasmania and the Northern Territory.