Farmer-owned co-operative North Cork Creameries has ceased production at its Kanturk-based plant with the potential loss of up to 100 jobs.
It follows the suspension of its wastewater discharge licence for the second time in three months by the Environmental Protection Agency.
Yesterday, staff at the plant were called to a meeting and told they were to be made redundant, while shareholders were briefed at meetings today in Cork and Kerry.
SIPTU, which represents some 80 of the 95 staff, said they were not officially told of the decision to lay off staff and that they have written to North Cork Creameries seeking an urgent meeting with management, but have yet to receive a response. The union will meet with their members in Kanturk on Monday.
Co-op employee and SIPTU shop steward Dominic Byrnes said there is confusion on-site today.
"We were told a consultation would take place next week with all employees on redundancies and so on," he said. "But today there seems to be confusion on the site, the word going around is that some jobs might be kept on in certain areas.
"We are just looking for the company to clarify will we have jobs or who is going to be working because, as you can imagine, it is a stressful time for people when you are told you are going to lose your job."
Local businessman and spokesperson for the town's Chamber of Commerce, Kieran Fitzgerald said that if the plant shuts it will be a huge blow to the town.
"It is a pillar industry in a small town like Kanturk," he said.
"The 98 jobs are the direct and obvious fallout but then there is the secondary layer of impact, on the small and medium-sized local businesses, the cafes, the suppliers. It is a huge blow to the locality."
Fine Gael TD for Cork North West John Paul O'Shea described the news as "a devastating blow for workers, their families and the wider community".
Established in 1928, the co-operative had its discharge licence for its wastewater treatment plant suspended by the EPA last month, which meant processing and production have since ceased.
Its discharge licence had previously been suspended last November, but was restored in early January following submissions from the co-op.
However, on 19 February last, the EPA said that in the six weeks since the notice was lifted, the co-op "had failed to maintain adequate control of the plant leading to ongoing non-compliances with emissions limit values".
It said given the "persistent nature of the performance issues with the wastewater treatment plant", they considered there was an elevated risk of discharges that threatened to cause "an immediate adverse effect on the environment, in particular the ecological and chemical water quality of the River Allow", and once again suspended the discharge licence.
In a statement issued today, the EPA said that due to persistent compliance issues with the effluent discharge, it had issued two notices directing the co-op to suspend discharges from their outfall point.
The EPA will continue to closely monitor the situation, but stressed that "discharge will not be permitted to resume until they can reliably maintain compliance with the conditions of their licence and operate their facility without posing a risk to the environment".
Last August, following a major fish kill in the River Blackwater, the co-op was investigated by the EPA as part of an exhaustive search for the source of the pollution, but it found no causal link between its discharges and the fish mortalities.
North Cork Creameries processes over 315 million whole milk litres into a range of food ingredients and dairy products.
It is understood that the Carbery Group in west Cork is set to temporarily take some of the milk that would normally be processed by the co-op.
Efforts to contact the co-op and its board for comment were unsuccessful.
