The federal government has rejected a request from fruit processor SPC Ardmona to provide a $25 million lifeline.
SPC Ardmona's parent company Coca-Cola Amatil was seeking a $25 million contribution from the federal government and a matching amount from the Victorian state government to match its $150 million investment in new products and technology.
Government backing would enable it to continue production and provide up to 3000 direct and downstream jobs in regional Victoria, the company has said.
But following a cabinet meeting in Canberra on Thursday Industry Minister Ian Macfarlane announced the government will not be providing any assistance.
"We believe industry reform needs to be led by industry," the minister said.
"And we believe that in this case the government would have to borrow money on behalf of the taxpayers to put into the proposal where we believe Coca-Cola with a very, very healthy balance sheet is able to provide that money from within its own resources."
Prime Minister Tony Abbott defended the decision, saying it was up to the managers of SPC and their strong parent company to set the course.
"It's not really the government's job to restructure a particular business," he said.
"The job does need to be finished and it does need to be finished by the company."
Mr Abbott praised Coca-Cola Amatil for its preparedness to restructure SPC Ardmona in the lead-up to cabinet's decision.
The government would support the company if it decided to continue its restructuring and encouraged it to renegotiate enterprise bargaining agreements which were "well in excess" of the award.
"It's very important now that Coca Cola complete the restructuring that they have embarked upon.
Mr Abbott described SPC Ardmona as a very strong business.
The decision set an "important marker", he said.
"This is a government that will make sure that the restructuring that some Australian businesses need, some Australian sectors need is lead by business as it should be," he said.
Mr Macfarlane said the request had an extensive and fair hearing, with a three hour discussion by cabinet on Thursday.
"I'm very cognisant of the uncertainty that will face the workers in that community," he said.