The announcement that Gunns Limited has entered into voluntary administration is unfortunate evidence of the pressures facing the broader forest industry, the Premier, Lara Giddings said today.

Ms Giddings today expressed sympathy for the employees affected by today's announcement.

"Foremost in my mind is concern for the employees of Gunns Limited as they come to terms with this announcement," Ms Giddings said.

"The State Government will do everything it can to support employees through this process."

Ms Giddings said it was the Government's hope that Gunns Limited's assets can be sold as going concerns.

"Gunns Limited has a world-class plantation estate, the value of which remains to be realised.

"It is still too early to speculate on what this announcement may mean for the pulp mill project, which has full approvals in place and is awaiting financial close."

Ms Giddings said the announcement starkly illustrated the challenges confronting the Tasmanian forest industry.

"It is a blunt and unfortunate reminder that maintaining the status quo or trying to hold on to the ways of the past is not an option," Ms Giddings said.

Just last month Gunns blamed the high Australian dollar and competition from cheaper plantation products from Vietnam and Thailand for a significant financial loss:

"The company does not expect these conditions to improve in the near to medium term, due to the significant and growing oversupply of plantation woodchips available from Australia and an expectation that the Australian dollar will remain around current levels compared to the US dollar."

"These are the same pressures confronting the broader forest industry and our own Government Business Enterprise, Forestry Tasmania.

"Everything we are doing is in response to the worst industry downturn this state has ever experienced.

"For too long the Liberal Party has tried to deny these challenges.  Just weeks ago Will Hodgman even bizarrely tried to claim that Gunns Limited had nothing to do with the broader industry.

"There is now nowhere for Will Hodgman and the Liberal Party to hide - there can be no denying that the head in the sand approach will condemn the Tasmanian forest industry to oblivion."

Ms Giddings said it should be remembered that Gunns Limited's decision to exit native forest harvesting created the space for the roundtable negotiations between conservationists and the industry that continue to this day.

While the Liberal Opposition has tried to undermine the Intergovernmental Agreement at every turn, Gunns recognised that the process provided a significant opportunity to strengthen the Tasmanian forest industry.

The Directors' report to members in December 2010 said:

"The implementation of the Tasmanian Forests Statement of Principles is an important development for the company and broader Tasmanian industry.  The Company has made a clear commitment to exit from the processing of native forest resource in Tasmania.  Implementation of the TFSP provides and mechanism for the Tasmanian industry and community to utilise the opportunity provided by this decision to re-allocate resource to resolve long standing conflict between industry and the environmental movement."

"Today's announcement does not diminish the reality at the heart of that statement - the IGA represents the best possible chance of securing a vibrant forest industry into the future," Ms Giddings said.

"I would again encourage both sides of the debate to return to the negotiating table to try to reach a final agreement."