The Irish Dairy Industries Association (IDIA) today warned that the Carbon Tax introduced in today's Budget will undermine the competitiveness of Irish exporters.
The association also said that it will "give advantage" to imported food products and "place more jobs at risk in the food sector".
IDIA director, Michael Barry said: "A carbon tax will inflate the cost of domestically produced food products relative to imports. The imported equivalent will not be hit with the same taxes and will have a competitive advantage over domestically-produced food.
"The tax will increase costs at all stages of the food production process.
"The farmer will pay a carbon tax on the fuel used in producing the food; the transportation of raw materials will be taxed; food processing will be subject to a carbon tax and packaging, storage and distribution will be taxed.
"The revenues collected from a carbon tax must be used to reduce costs for business. This tax will do little to enhance overall sustainability and risks giving advantage to cheap food imports. "