The family-owned company shocked the local community by saying 100 out of 250 jobs could be lost next March at its Cannington dairy site, which it bought from Dairy Crest 11 years ago.
Yeo Valley said it was restructuring because it was being affected by increasing production and raw materials costs at the same time as consumers were showing in the recession and spending less on its products.
West Somerset MP Ian Liddell-Grainger expressed his shock at the news.
Mr Liddell-Grainger said: “I am absolutely horrified and obviously very concerned by these job losses.
“I understand things have not been good for anybody lately, but I would not have expected Yeo Valley to have been hit by the economic problems.
“Yeo Valley is an exemplary employer and I am very worried about these figures of 100 jobs to go.
“I will be in touch with the chief executive to find out exactly what is going on.”
The Cannington redundancies are likely to be across the board with both operational and management posts affected.
The plan is to move the factory from a 24-hour-a-day, seven-day-a-week production cycle to a 12-hour shift pattern.
Yeo Valley director Graham Keating said: “Trading within the dairy market is currently very tough.
“Although we saw an increase in sales over the last 12 months of seven per cent, our raw materials and production costs have rocketed significantly.
“Our organic milk sales continue to grow strongly but within the highly promotion-driven and price sensitive yoghurt market, we have seen consumers become more cautious with their spending over the last three months and this trend is set to continue into 2009.
“It is imperative that we restructure our business in order to remain competitive and we are therefore left with no alternative than to reduce production in the parts of the company most affected by this buying downturn.”
Mr Keating said every effort would be made to offer alternative employment within the company to those affected by the job cuts.
The company has now begun a 90-day redundancy consultation period with staff.
Yeo Valley also runs two other dairies, in, Blagdon, North Somerset, and Newton Abbott, Devon, and a distribution warehouse in Isleport, near Highbridge, with a total of 1,300 employees.
Cheese and other dairy products have been made at Cannington since the 1930s, and today it produces Yeo Valley Organic’s big-pot yogurts, as well as those for a number of retailer brands, plus the innovative ‘Yeos’ organic children’s yogurt tubes.
Despite its 24-hour production cycle - which was necessary to meet demand - Yeo Valley boasted that its small-batch production methods ensured its yoghurts were ‘untarnished by modern processing aid ingredients - they simply are not necessary’.
The firm is part of a family-owned farming and dairy business founded by husband and wife Roger and Mary Mead, who started making yoghurts with milk from their dairy herd in 1974.
Organic yoghurt production started in 1993 after an approach by local farmers who were producing organic milk but could not find a regular demand for it.
Last year, the firm welcomed the Queen to its North Somerset headquarters after the firm was awarded the Queen’s Award for Enterprise for its contributions to sustainable development, including the long-term, fair-trading support it had given to organic dairy farmers.
In October of this year, Yeo Valley closed its luxury organic ice cream and frozen yogurt dairy near Bovey Tracey, Devon, and transferred the 50 staff to Newton Abbot because it said demand was so great that it needed larger production facilities.
- Our photograph shows Yeo Valley’s Cannington factory. Photo submitted.