Ireland's milk producers are facing fines of over €15 million for exceeding the amount of milk they are allowed to produce under the EU's quota system.
Ireland is allowed to produce 1.1 billion gallons of milk annually as part of the EU scheme which stabilises prices and prevents market gluts.
However, in this milk year, which runs from April 1st to the end of March, Irish dairy farmers far exceeded what they are allowed and now individually face stiff penalties.
A Department of Agriculture spokesman described the over-production as "very serious".
He said it was one of the largest superlevy bills Ireland has had to face in some time.
"There was over-production because of the weather and especially because of the mild spring this year, which meant milk was continuing to be produced when in recent years it might not have been.
"However, the various co-operatives have already been engaging in deducting the fines from the farmers, so they will not be facing one major bill."
A statement from the EU which announced the level of fines facing Irish farmers said nine member states exceeded quota in the 2004/2005 milk year.
"According to their declarations, nine member states (Belgium, Denmark, Germany, Ireland, Italy, Luxembourg, the Netherlands, Spain and Austria) exceeded their quotas, and together account for an overrun of 1,069,000 tonnes. Consequently, the levy totals €356 million."
It said six member states, France, Greece, the UK, Portugal, Finland and Sweden, have not fully used their quotas. The 10 new member states did not exceed their quotas.
Farmers will have to pay a fine of 33 cent per kg of over-produced milk. The bulk of farmers facing the fine are suppliers to the Glanbia co-op which accounts for some 25 per cent of the total over-run.
"A lot of farmers took the chance this year that we would not fill our quota and produced too much," said an industry source.
"The truth is that it was a very good year for milk production and now they have been caught."