The Engineering, Printing and Manufacturing Union says the loss of 86 jobs at sheep skin processing plant near Shannon will have a huge impact on the town's retailers.
The union is comparing the impact of the closure of the fellmongery in the Horowhenua town to similar-sized factory shutdowns in Oamaru and Greymouth.
Silver Fern Farms on Monday announced it will sell its fellmongery, the North Island town's biggest employer, to the Lowe Corporation.
The meat cooperative will process its North Island pelts through Lowe Corporation's facilities in Hastings.
Neither company has said how many of the jobs being lost in Shannon will move to Hawke's Bay.
EPMU national secretary Bill Newson says the effect will be similar to when the Wool Spinners' Plant in Oamaru closed earlier this year, costing nearly 200 jobs.
Mr Newson says such closures take 'huge chunks of buying power out of the communities'.
He says typically the local retailers are often hardest hit, as the laid-off workers move on to find other jobs.
Entrepreneur Suzie Johnson, who employs staff at four businesses in Shannon, says she is very upset for the workers as there are few other job options in the town right now.