The cigarette maker Philip Morris is closing its Australian manufacturing operations, with 180 jobs to go.



The company's Victorian plant in Moorabbin will close by the end of the year.

Philip Morris said all Australian cigarette production would be moved to its Korean plant. "This is an extremely difficult decision, and devastating news for all of our employees," the Australia, New Zealand and Pacific Islands managing director, John Gledhill, said on Wednesday.

"Philip Morris Limited has a proud history of nearly 60 years of manufacturing in Moorabbin, being the first Philip Morris affiliate established outside of the United States, and many of our employees have been with the company for a significant part of that journey."

The company said it had been unable to increase exports of Australian-made cigarettes owing to Australian government regulations, while the local market had been in gradual decline in the past decade. It said the introduction of reduced-fire risk requirements for all Australian-made cigarettes in 2010 resulted in products that did not match consumers' preferences in other markets in the region.

The company said its Australian sales volumes had been stable in 2013 despite the introduction of plain packaging and continued growth in illicit trade. "However, with any significant export opportunity restricted by Australian government regulations, our Moorabbin factory is significantly underutilised, operating at less than half of its currently installed capacity," Gledhill said.

"Regrettably, factors beyond our control prevent us from fully utilising the facility, and accordingly it's been identified for closure."

He said Philip Morris would maintain a "strong, ongoing commercial presence in Australia" and about 550 people would continue to be employed at its Melbourne headquarters.

About 180 staff directly involved in manufacturing would be affected by the shutdown, Gledhill said. He said affected workers would be offered redeployment opportunities where feasible.

The Australian Workers Union said the shutdown was a further blow to manufacturing in Victoria.

"We should be planning ahead with a blueprint for jobs that addresses the catastrophic consequences for our community of manufacturing progressively shedding people in this state," said the union’s Victorian secretary, Ben Davis.

"These are people who have done an honest job, been loyal to their employer and contributed to the life of this state. They need jobs."

• This article was amended on 2 April 2014. A previous version incorrectly stated that Philip Morris cited Australia's plain packaging laws as a factor in its decision to close the plant.