The closure of the Cadbury factory in Dunedin, with the loss of up to 380 jobs, will be devastating for staff and their families, says the local mayor.
The first redundancies at the Dunedin plant are expected later this year. Photo: RNZ / Lydia Anderson
Owner Mondelēz International is proposing to end manufacturing operations in the city next year and move production to existing Australian sites.
The factory has been an icon on the Dunedin landscape for more than 130 years, and has been producing chocolate for Cadbury for more than 80 years.
Ex-Cadbury employee Keith Humphries, who was visiting Dunedin today, lost his job after 21 years when Cadbury closed its Auckland factory in 2009.
He said he had some idea of what the Dunedin workers would be going through.
"The day they told us, they got everybody into the lunch room and everybody had an idea it was something serious.
"Each time a section closed they would have a farewell in the lunch room and there'd be boxes of tissues on the tables and it was a whole lot of sad occasions."
Mr Humphries says he was shocked to hear of the latest closure, particularly after Auckland staff were told Cadburys was shifting some production to Dunedin.
Dunedin mayor Dave Cull said Mondelēz had made it clear to him this morning there was nothing the city council could have done to influence its decision.
He said it was a devastating time for staff and their families.
"My message to those workers is that you are not in this alone. The city will pull together to support you, your families and the wider community."
Factory to be closed in 2018
Staff at the Cadbury factory were briefed this morning, while security guards were stationed outside the doors.
If the proposal was adopted, the first phase of redundancies would take place late in 2017, with about 100 people remaining with the business until early 2018.
Etu union spokesman Chas Muir said they believed the factory was doing well.
He said the local union in Dunedin was contacted by the company late yesterday and told about the proposed closure.
The workers were covered by a robust collective agreement, which carried decent terms and conditions, and also redundancy, he said.
"We will support those workers right the way until the factory door closes."
Cadbury World attracts more than 110,000 visitors a year. Photo: RNZ / Lydia Anderson
Mondelēz area vice-president Amanda Banfield said when the announcement was made this morning, the mood was sombre, but workers were not completely surprised.
"The factory's distance from its main market, low volume and complex product portfolio, make it an expensive place to manufacture our products."
The business had absorbed additional costs associated with Dunedin production for a number of years, and there was existing capacity in Australia, she said.
The company said it would invest in redevelopment of the Cadbury World tourist attraction, which had more than 110,000 visitors a year.
It would keep 130 commercial, finance and human resources staff in New Zealand.
Ms Banfield said they would look for another New Zealand producer to take over products such as Jaffas and Pineapple Lumps, which were only produced in Dunedin. If they could not find one, those sweets could be produced in one of Cadbury's Australian sites, she said.
Workplace Relations Minister Michael Woodhouse said it was not possible for the government to bail out Cadbury, but said another business could take over the processing part of the Dunedin site.
He said he had joined Mr Cull in forming a group of local agencies, such as the Otago Chamber of Commerce, to provide the workers with support.
Meanwhile, a senior executive at New Zealand chocolate business Whittaker's said it was fully committed to remaining in the country.
Whittaker's NZ chief marketing officer Philip Poole said the firm plans to expand but it was not in a position to absorb any more staff at present.
"We are fully committed to manufacturing in New Zealand. We have one factory, and that's in Porirua. And we've developed the factory over a number of years, and we have got some further development plans."
Mr Poole said the decision by the Cadbury owner would be sad for Dunedin.