More than 200 experienced dairy workers will get laid off after National Foods announced that it would shut down its western Sydney plant.

The Transport Workers Union (TWU) claims that it is a direct outcome of a misguided merger that spawned the new company. National Foods will lay off 240 dairy factory workers, with years of experience in the industry, when the yoghurt manufacturing plant at Wetherill Park shuts down on March 2012.

National Foods said its shutting down of the plant is part of a general "consolidation" that involves the Baulkham Hills plant as well, and the other ones at Morwell and Cobden in Victoria.

The dairy company said a self examination had shown that all four plants making longer-life and fresh dairy products at the same time was "not sustainable".

"When we take into consideration the duplication in our manufacturing operations ... and the reduced demand for products ... the four sites were not viable in the long term," Arthur Murphy, National Foods' operations director, said.

"[The move] is about ensuring we remain a sustainable and viable operator," he maintained.

However, the TWU claims that the decision is really about cutting costs and maximizing profits.

TWU maintains that the laying-offs are the inevitable consequence of the merging of National Foods with Dairy Farmers, because it implicates operations duplication. National Foods is Japanese-owned, while Dairy Farmers was previously Australian.

Despite the TWU's opposition, the Australian Competition and Consumer Commission approved the merger.

Wayne Forno, state secretary of TWU said, "The union warned the ACCC in 2008 that limited divestitures by Kirin would be insufficient to protect milk workers' jobs."

"Since the merger last year, employees have been worried sick that their jobs would disappear. News that the plant will close and operations shift to existing plants in Victoria, confirms their worst fears."

Most of the dairy workers to be laid off are already in their fifties, and many are from non-English-speaking origins, meaning they will have a hard time to retrain and get employed elsewhere, TWU says.

Peter Lane, dairy industry official of TWU added, "These are guys who have been at the plant for more than 20 years - they don't know anything else."

"Retraining at that age is difficult at the best of times, but when you factor limited English skills, you'd have to say that they are effectively condemning some of these guys to the dole queue."