Australian cheese entrepreneurs beat out 49 competitors to rescue iconic King Island Dairy. They secured 2,500 cows across 1700 hectares and promised product innovation after a decade of stagnation. The hands-on owner is relocating to the factory floor while the government chips in $10M to preserve 60 jobs on a remote island.

EXECUTIVE SUMMARY: Queensland cheesemakers Nick Dobromilsky (40) and Graeme Wilson (66) have acquired King Island Dairy through their newly formed entity, King Island Dairy 2, prevailing in a competitive process that started with 50 interested parties. The comprehensive deal includes the production facility, a world-renowned brand, two dairy farms with 2500 cows across 1700 hectares, and the award-winning Heidi Farm brand whose Tilsit recently won “Best in Class” at the 2024 World Championship Cheese Contest with an impressive 99.8/100 score. Dobromilsky will relocate to King Island to personally drive product innovation and quality improvements, addressing a decade-long stagnation in new product development. The Tasmanian Government has committed $10 million over ten years, including $2.5 million for capital works, tax exemptions, and access to a concessional loan facility of up to $15 million.

KEY TAKEAWAYS:

• From 50 interested parties, Australian entrepreneurs secured King Island Dairy along with 2500 cows across 1700 hectaresKing Island Dairy rescue
• Heidi Farm brand included in the deal recently won “Best in Class” at the 2024 World Championship Cheese Contest for its Tilsit cheese with a 99.8/100 score.
• New owner Nick Dobromilsky will relocate to King Island to work hands-on to improve quality and develop new products.
• Plans include increasing milk production from 10-12 million to 15-18 million within three years.
• Tasmanian Government provided a crucial $10M support package, including $2.5M for capital works, tax relief, and access to up to $15M in concessional loans.
• All 60 jobs are preserved on the island, which has 1,600 residents. Dairy is central to the local identity and economy.

You can almost taste the relief in the salty sea breeze blowing across King Island. Just months ago, this place was facing disaster. Now? The rumble of milk tankers and the steady hum of cheese production tell a different story.

In a move nobody saw coming, Queensland cheese enthusiasts Nick Dobromilsky, 40, and Graeme Wilson, 66, have pulled off the impossible. They’ve beaten out 49 other bidders to snatch King Island Dairy from the corporate chopping block and keep this 100-year-old treasure firmly in Australian hands.

This isn’t your everyday business deal. It’s a full-blown revolt against the “close it if it doesn’t hit our profit target” mentality that has been crushing local producers for years.

DAVID VS. GOLIATH: HOW TWO CHEESE LOVERS OUTMUSCLED THE CORPORATE GIANTS

When Canadian dairy behemoth Saputo announced it would shut down King Island Dairy by mid-2025, Tasmania’s farming community was stunned. It wasn’t just about losing a factory—it was about watching yet another piece of Australia’s dairy heritage vanish. We’ve already lost 43% of our dairy farms in the last twenty years (from 12,896 in 2000 to just 4,835 today), and nobody wanted to see King Island become another statistic.

That’s when Dobromilsky and Wilson stepped into the picture. These two cheese enthusiasts saw something the corporate spreadsheet jockeys completely missed – the magic combination of King Island’s unique environment and century-old cheesemaking know-how that can’t be replicated.

“When we heard that King Island was closing,” Wilson recalls, “I rang Nick and said, ‘Look, are you interested in buying another cheese business?’ We looked at it, did the due diligence, and modeled it. With our experience, we know it can work well. It’s a profitable business if it’s run properly.”

Their newly created company, King Island Dairy 2, somehow beat dozens of competitors in a white-hot bidding war. What started with 50 interested parties eventually narrowed to six serious contenders and three preferred bidders. Against all odds, these two cheese lovers came out on top.

This isn’t their first rodeo, either. They already own Queensland’s largest Mediterranean cheesemaker, Olympus Cheese, and last year launched Desi Valley Dairy, which makes traditional South Asian dairy products like paneer and yogurt. Before getting into cheese, Dobromilsky worked in finance, while Wilson previously owned Decor Corporation. This mix of financial smarts and hands-on dairy experience gives them a unique edge.

So, what exactly did these guys buy? It’s a much bigger deal than just a cheese factory:

THEY BOUGHT THE WHOLE DAIRY ECOSYSTEM – NOT JUST THE FACTORY

Here’s what makes this deal so different from your typical corporate takeover: These guys aren’t just cherry-picking the profitable bits. They’ve gone all-in.

They’ve grabbed the actual King Island Dairy facility. This internationally known brand name commands premium prices, and here’s the masterstroke—two massive dairy farms covering 1700 hectares with 2500 happy cows already producing that legendary King Island milk.

They’ve secured the entire dairy food chain from grass to grocery store. Smart move. They’ve even picked up the Burnie-based Heidi Farm brand that makes those incredible Gruyere, Tilsit, and Raclette cheeses you’ve probably seen in gourmet stores.

And speaking of Heidi Farm – their Tilsit cheese just crushed it at the 2024 World Championship Cheese Contest in Wisconsin. We’re talking ‘Best in Class’ with a mind-blowing 99.8/100 score! That put it in the top 20 out of 3,303 entries worldwide. It’s not too shabby for a minor Aussie operation, right?

“Most of the milk will come from those two farms we have secured,” Dobromilsky says, “and we’ll partner with other dairy farms on the island to support them long-term.” That’s a refreshing change from what we usually hear – processors cutting supply contracts and leaving farmers high and dry.

Do you want to know what makes King Island milk so unique? Their cows produce milk with 4.8-5.2% butterfat and 3.8-4.0% protein – way higher than mainland averages. Why? It’s the island’s perfect climate, reliable rainfall (about 1,000mm yearly), and mineral-rich soils. Those numbers translate directly into better yields and more decadent flavors for cheese makers. It’s liquid gold.

THE NEW BOSS IS MOVING TO THE FACTORY FLOOR

Get this – while most food company executives are busy pushing papers in some distant corporate office, Dobromilsky is packing his bags and moving to King Island to work hands-on in the factory.

“I’ll relocate here to come and work on the factory floor,” he insists, “to ensure I fully understand what’s going on and improve the quality. At Olympus, we’re known for our quality. We’re not a massive producer. I’ll return that DNA to this site and look forward to working with the team to develop new products. You need to be hands-on for that.”

This is a complete 180 from how the previous corporate owners ran things. The new guys have already spotted tremendous opportunities, noting that “the brand hasn’t released anything for at least a decade.” Can you believe that? Ten years without a single new product!

They plan to “expand the product range and improve the quality back to the artisan way of making cheese because it’s probably been a little more commercialized with the foreign ownership.”

They’re not just talking vaguely about improvements, either. They’ve already sketched out some specific new products:

1. A line of cave-aged specialty cheeses using King Island’s natural limestone formations
2. Seasonal, limited releases showcasing the unique flavor profiles from different pasture seasons
3. Fusion products blending King Island’s techniques with Olympus Cheese’s Mediterranean traditions

For dairy farmers watching all this unfold, it’s a masterclass in how specialty processing facilities should be run – by people who understand both the science of cheesemaking and the business of premium food marketing. That’s a rare combo you don’t find in multinational conglomerates obsessed with commodity production.

WHAT MAKES KING ISLAND SO SPECIAL? IT’S LITERALLY IN THE AIR

You’ve probably heard King Island cheese is unique, but do you know why? It’s not marketing hype – it’s science.

“With some of the cleanest air in the world, the island provides the perfect environment for crafting high-quality, artisanal cheeses,” explains Dobromilsky. But there’s more to it than fresh air.

King Island sits right in the path of the Roaring Forties – those powerful westerly winds that sweep through the Southern Hemisphere. By the time these winds reach the island, they’ve traveled thousands of kilometers across the Southern Ocean, picking up zero pollution. The result? Some of the cleanest air you’ll find anywhere on Earth.

This pristine environment nurtures lush pastures dominated by ryegrass and clover varieties that thrive in the island’s mineral-packed volcanic soil. The cows dine at a five-star salad bar every day.

You can’t replicate these conditions in a lab or on the mainland—it’s a natural advantage that the new owners clearly understand and plan to leverage. This is a powerful reminder to dairy farmers everywhere that sometimes your most valuable asset isn’t your equipment or herd size—it’s the unique characteristics of your specific location.

THE GOVERNMENT STEPPED UP WITH SERIOUS CASH

Let’s talk money. The Tasmanian Government didn’t just offer thoughts and prayers – they put $10 million on the table over the next decade to support this transition.

That breaks down to $2.5 million in immediate capital works funding to upgrade equipment that’s seen better days, stamp duty exemptions worth about $1.2 million on the property transfer, payroll tax relief for five years, and access to a concessional loan facility of up to $15 million for future expansion.

Premier Jeremy Rockliff had personally promised the dairy “would not close on my watch,” and unlike many political promises, he delivered. “Without the package, the dairy, essential to the fabric of this community, would have ground the island to a halt,” he admitted.

This hands-on approach shows how the government can work with private businesses to save critical agricultural assets when they put their minds to it. When the Premier said, “When it was clear that Saputo was willing to walk away and close the dairy, we knew it was on our Government to save the dairy,” he wasn’t just talking politics – he was acknowledging the harsh reality many rural communities face when corporate priorities shift.

In perspective, Australia has lost at least 15 dairy processing facilities in the past decade alone. Major processors like Fonterra, Lion Dairy, and Bega have been closing plants left and right to “improve efficiency,” – which usually means centralizing operations and leaving regional communities high and dry.

THIS IS ABOUT MORE THAN JUST MAKING CHEESE

For King Island’s 1,600 residents, saving these 60 jobs wasn’t just about employment statistics – it was about survival. The dairy’s impact ripples throughout the island economy, supporting everyone from truck drivers to tourism operators.

TasFarmers chief executive Nathan Calman put it perfectly: “The King Island community took immense pride in the King Island Dairy brand, which plays a crucial role in the island’s identity and economic sustainability.” His organization had “advocated to all levels of government and Saputo to ensure the site did not close,” hoping “to secure a future owner who would act as a custodian of the factory, preserving its legacy and continuing its operations on the island.”

He also highlighted a challenge that isn’t going away: “All industries on King Island depend on reliable and efficient freight links to reach premium markets across Australia,” noting that “current shipping services and freight equalization measures are not fit for purpose and require urgent reform.” In plain English – getting products off the island is still a significant headache that needs fixing.

Local pub owner Tom Sullivan didn’t mince words: “This dairy isn’t just about jobs – it’s about who we are. When visitors come to King Island, they expect to taste our cheeses, visit the dairy, and experience what makes this place special. Without the dairy, we’d lose much of our identity and tourism appeal.”

THESE GUYS WANT MORE MILK, NOT LESS

Here’s something you don’t hear daily in the dairy industry – these new owners want MORE milk, not less. While most processors seem desperate to cut supply, Wilson’s worried about not having enough: “We can only make as much cheese as we can get milk. The first thing we must do on the island is create more milk for the dairy. Raw materials is what’s going to hold it back.”

They’re not thinking small, either. They want to boost milk production from 10-12 million liters annually to 15-18 million liters within three years. That massive 50% increase requires the island’s dairy herd to grow from 2,500 to around 3,800 cows.

This aggressive growth mindset creates real opportunities for dairy farmers on King Island and potentially nearby regions as production ramps up. And because they’re focused on premium specialty products instead of commodity cheese, there’s potential for better returns throughout the supply chain.

After a decade of nothing new under previous ownership, the product innovation plans are genuinely exciting. By blending Olympus Cheese’s Mediterranean expertise with King Island and Heidi Farm’s offerings, they’re positioned to create unique new products for Australian and export markets.

LET’S BE REAL – THERE ARE SERIOUS CHALLENGES AHEAD

Despite all the optimism, we need to acknowledge the tough challenges ahead. The new owners face four significant hurdles that will test everything they’ve got:

First, logistics are a constant nightmare. Being stuck in the middle of Bass Strait means freight costs run 30-40% higher than for mainland competitors. Shipping delays regularly throw a wrench in the supply chain, and rough seas can halt shipping altogether for days. It’s not ideal when you’re moving perishable dairy products!

Second, finding workers is challenging. With just 1,600 island residents, recruiting skilled cheesemakers and dairy workers is an uphill battle. Housing shortages make it even more difficult to attract new people.

Third, energy costs are about 22% higher than in mainland Tasmania. That directly impacts production costs and competitiveness. There’s talk about tapping into renewable energy, particularly wind power, which requires serious upfront investment.

Finally, the premium cheese market gets more crowded every year. The new owners will fight against established European brands with centuries of heritage and a constant stream of new artisanal producers everywhere.

Tackling these issues will demand creative thinking and significant investment beyond the initial rescue package – but Dobromilsky and Wilson don’t seem intimidated by what lies ahead.

WHAT CAN OTHER DAIRY FARMERS LEARN FROM THIS?

If you’re a dairy farmer watching this unfold, there are some valuable lessons here:

First, don’t assume corporate closure decisions are set in stone. When big processors announce they’re shutting down, local entrepreneurs who understand the industry might see potential, whereas multinationals only see problems. The next time you hear about a processing facility closing, ask yourself if the right local partners see an opportunity where others only see costs.

Second, vertical integration creates serious advantages. These new owners have guaranteed their milk supply and quality control from paddock to plate by securing their farms alongside the processing facility. Could you partner with like-minded farmers to create similar integration in your region?

Third, premium positioning provides shelter from commodity price storms. King Island and Heidi Farm products command top dollar because of their exceptional quality and brand reputation. What unique qualities does your milk have that might earn premium prices in specialty markets? Are there regional characteristics you could leverage?

Fourth, government support can make or break strategic agricultural assets. The Tasmanian Government’s intervention shows what’s possible when public officials recognize the importance of food production infrastructure. Have you engaged with your local representatives about the strategic importance of dairy infrastructure in your region?

WHAT’S NEXT FOR KING ISLAND DAIRY?

As the new owners prepare to take complete control by mid-2025, here’s what to watch for:

1. Equipment Upgrades: That $2.5 million government-funded capital improvement will target energy efficiency and production capacity, with work likely starting by August 2025.
2. New Cheese Varieties: The first new products in over a decade should hit shelves by late 2025, with development already underway to coincide with the ownership handover.
3. More Cows: Breeding programs and potential land acquisitions are being discussed to support that ambitious 50% increase in milk production over three years.
4. Going Global: Building on Heidi Farm’s recent cheese competition triumph, the new owners plan to push into premium Asian markets – especially Singapore, Japan, and South Korea – by early 2026.
5. Tourism Boost: To strengthen consumer relationships and brand loyalty, enhanced visitor experiences, including expanded factory tours and cheese master classes, are in the works.

For Australian dairy farmers tired of hearing about industry consolidation and farm exits, King Island Dairy’s salvation is a breath of fresh air – proof that with the right mix of entrepreneurial vision, quality focus, and strategic support, dairy businesses can buck the trend toward rationalization and forge new paths to profitability.

As Wilson said, “Sometimes the best opportunities come disguised as corporate cast-offs. We’re preserving a historic cheese operation and building the foundation for the next century of premium Australian dairy.”

LEARN MORE:

• How Premium Dairy Products Command Top Dollar While Commodity Prices Fluctuate
• Vertical Integration: The Growing Trend of Processor-Owned Dairy Farms
• Government Support Programs That Can Help Save Your Local Processor

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