Dozens of jobs are to go when Milk Link ends production at its plant in Essex.
The company announced it was pulling out of long life milk production at Tanners Foods in Sible Hedingham and transferring to other plants.
About 52 jobs will go in the first phase of the shutdown next month and another 18 in March 2006.
Workers were told on Tuesday that production would be moved to Crediton in Devon and Kirkcudbright in Scotland - both areas of heavy milk production.
Milk Link, a Bristol-based co-operative owned by 2,500 dairy farmers, bought Tanner Foods from the Tanner family in 2002.
The company said that with milk production moving towards the west, increased fuel costs meant it was becoming increasingly uneconomic to move milk long distances to Essex.
Chief executive Barry Nicholls said: "The proposed closure does not reflect on the hard work and commitment shown by our employees and we are, of course, conscious of the impact this will have on them."
A spokesman for the company said a 30-day consultation with the union Amicus and workers' representatives would start immediately.