Factory Records Australasia was officially launched in July 1985 by Andrew Penhallow in partnership with Factory. Penhallow had previously been a partner with Paul Gardener in GAP Records, a label distributed by EMI Records (Australia) (and later by CBS Records Australia) which licensed Factory releases (and other foreign labels) for Australia.

Factory Australasia was Factory's most successful foreign offshoot with a number of singles and albums reaching into the Australian Top 20, Top 10 and even Top 5 charts.

All Factory Australasia records and three CDs were manufactured and distributed by CBS Records Australia. All other CDs were imported from the UK. Most Factory Australasia releases featured the same tracks and catalog number as the UK versions, although there were several small differences, and some Australia-only releases.

End of 1989 saw the demise of Factory Australasia - mainly because Factory headquarters in Manchester wanted to secure a better commercial backing through a major label. Factory boss Tony Wilson travelled to Sydney and, together with Penhallow, held negotiations with several Australian based labels. Eventually, Festival Records made the highest offer and so the entire catalogue moved to the Sydney based company, where production commenced in January/February 1990. Although Penhallow kept a caretaker role for Factory releases on Festival, he concentrated on his own label, Volition, focussed on Australian acts.

This label should only be used for Australian editions of Factory titles released via Factory Records Australasia/CBS from 1985 through 1989. Earlier titles should be entered under GAP Records. Later titles should be entered under Festival Records.

Despite being named Factory Records Australasia, the above only applies to records released in Australia. In New Zealand Factory ran independently as a direct offshoot of the UK parent, with distribution via RTC until 1983 and then EMI, and should be included on the Factory page with New Zealand as the country.