A radical reorganisation of the Dairygold Co-op is likely to lead to hundreds of redundancies over the next three years, according to the company.
Discussions on a three-year restructuring plan with unions have not yet begun but Dairygold is seeking to cut its 3,000 workforce by around two thirds.
However, its transport division, where 170 redundancies are being sought, will see many workers retain their roles as self-employed subcontractors while the proposed sale of the company's beef division will require the new owners to retain the staff.
While redundancies at its pig division are expected they are likely to be mitigated by activities being outsourced.The company says competition in the dairy sector, from New Zealand in particular, means the current cost base is no longer viable. Dairygold's profits fell from €25 million in 2001 to €4 million last year.
Dairygold Co-op employs 3,000 people at four plants around Co Cork and nearly 30 agri business stores.
The company's range of brands include Dairygold spread, Mitchelstown cheese Sno yoghurts and Galtee pork products and cheeses. It has an annual turnover in excess of 950 million.
The claim of 2,000 redundancies in today's Irish Examinerhave been desribed by management as exaggerated while SIPTU described the speculation as "unhelpful".
The newspaper report prompted calls for clarification from political representatives.
SIPTU regional secretary, Mr Gene Mealy, said consultation with Dairygold had not yet been scheduled and that speculation was premature."Management has confirmed that it will engage with the Union in relation toits restructuring proposals but at this stage nothing has been agreed interms of numbers of job losses or voluntary redundancies," Mr Mealy said.However, net job losses likely to number several hundred over the three years of the restructuring seem inevitable.
Labour Party TD for Cork East, Mr Joe Sherlock says Munster "is in serious danger of becoming an economic disaster area" and expressed concern for those seeking re-employment in the sector.
"Despite the fact that milk production is on the rise, the number of producers throughout the country is in serious decline. It is difficult to see how so many employees in the one industry would be able to be eased back into the workforce in such a climate," Mr Sherlock said.
Fine Gael's Mr Phil Hogan blamed the Government's economic policies for the lay-offs saying they had undermined competitiveness and that more redundancies in food processing could be expected as a result.
"The problems being experienced by Dairygold are further evidence of how uncompetitive Ireland has become, and the impact this is having on our exportsand international trade," the Carlow/Kilkenny TD said.