One of New Zealand's largest producers of mushrooms says it cannot comply with an Environment Court ruling over odours and will have to close.
More than 160 jobs will be lost at the Morrinsville plant of Meadow Mushrooms.
The company says the cost of trying to contain the smell at its compost facility is not economically viable.
It has already spent $2 million on remedial work and would be required to spend another $2 million, with no guarantee it would reduce the odours.
Meadow Mushrooms is asking the Environment Court for an extension so it can make an orderly closedown by the end of 2010.
If not, the closure will be immediate, says chief executive Roger Young.
Tony Gray, one of those who objected to odours from the plant, says that he feels for the workers who will lose their jobs, but consent requirements must be followed.
Mr Gray says he knows some of the workers and sympathises with them, but the law must be followed.
He says he does not believe the company truly wanted to comply with its resource consents.
Matamata-Piako District Mayor Hugh Vercoe says the closure is devastating for the community.
Mr Vercoe says losing 168 jobs in a small community is very difficult, especially in the current economic climate.
He says the company started as a family business in the town 54 years ago.