Enterprise Ireland has expressed disappointment that leading Irish co-op Dairygold has opted not to proceed with a €15.6 million research and development facility in Mitchelstown, Co Cork.

Enterprise Ireland chief executive Frank Ryan confirmed in a letter to Cork East Fianna Fáil TD Ned O'Keeffe that the agency had no role in the decision which saw Dairygold opt not to proceed with the facility at a greenfield site, which would have helped develop innovative dairy and meat foods

"It is a major disappointment that Dairygold did not proceed with the large-scale added-value project at Mitchelstown," said Mr Ryan in the letter. Details of the proposed facility were announced in June 2005 by Minister for Enterprise, Trade and Employment Micheál Martin, who said at the time that the planned collaboration between Dairygold, Teagasc and UCC pointed the way for food innovation in Ireland.

Yesterday Mr O'Keeffe said the decision was a major blow to the food industry in Mitchelstown, which is now facing decimation with the closure later this month of the Galtee Meats plants of Dairygold spin-off Breeo Foods.

A Dairygold spokesman confirmed the company was not proceeding with the €15.6 million R&D facility to develop both dairy and consumer food products but said that the co-op would be proceeding with a multimillion euro dairy R&D facility.