Dairygold is to begin discussions immediately with its staff about the planned transfer of its administrative offices from Mitchelstown and Mallow to Cork Airport.

The company yesterday insisted that no job losses were envisaged in the planned transfer of 120 administrative staff to the new centre close to Cork city.

However, local business and political representatives in Mitchelstown and Mallow were highly critical of the move and said it would have serious implications for the area.

Mr Jerry Henchy, Dairygold chief executive, said that the decision to centralise much of the co-op's "back office" administration processes and operations in Cork Airport Business Park - just outside Cork city - would not affect its milk processing, consumer foods and agri-trading divisions.

"As part of our overall programme to improve efficiency and profitability within the society we have had to look at how we manage and administer the business - from the very top down - with a view to ensuring that these functions are carried out as efficiently and cost effectively as possible," said Mr Henchy.

Mr Henchy said that Dairygold currently has 13 separate administration offices - eight in Mitchelstown and five in Mallow - dispersed across 65,000 square feet of poorly structured office space.

He said that consolidating the "back office" administration would lead to greater efficiency but unfortunately, no premises capable of accommodating the number of staff involved could be found in Mitchelstown or Mallow and that was why the co-op was transferring the back office administration to Cork Airport.

It is hoped that the first members of staff will begin moving to the new centre within the coming weeks and that the move will be complete by early January 2005.

A Dairygold spokesman said it was too early to quantify how much the company would save by the move.

News of the proposed centralisation was greeted with dismay and anger in both Mitchelstown and Mallow.

Mitchelstown Business Association chairman, Mr Tony Lewis described the proposal as "redundancy by stealth".

"Up until now, the PR spin being put on the redundancies which have already happened at Dairygold is that they were necessary to save the business but now this latest announcement to relocate the jobs to Cork Airport Business Park is redundancy by stealth," he said.

Mr Lewis said that Dairygold was "finally showing its true colours" by showing no regard for the community where it does its business and he warned that Mitchelstown was facing economic meltdown if the Government didn't address the problems facing the area.

Cork East Labour TD, Mr Joe Sherlock also strongly condemned the Dairygold announcement and said that it would turn Mitchelstown into an "economic disaster area". He called on members of the Dairygold board to oppose the move.

"Dairygold is a co-operative and as such, the decisions have to be ratified by the elected members and the board members should resign now before the industry is destroyed by a management with a plan for ending the dairy industry in Mallow and Mitchelstown," he said.

To date, Dairygold has shed over 1,000 jobs in the first two years of a three-year plan drawn up by Mr Henchy with the company cutting its workforce by 825 up to the end of 2003. A further 256 jobs were cut this year with the closure of its pig processing plants in Mitchelstown and Roscrea and the transfer of its Sno yoghurt plant from CMP in Cork to Monaghan.

However, according to a Dairygold spokesman, the only area remaining where the company plans further significant rationalisation is in its dairy division which currently employs 500 people in four milk processing plants and the CMP dairy in Cork.