Sinn Féin MEP Matt Carthy is calling for "urgent intervention" to save nearly 70 jobs in Monaghan.
Lakeland Dairies says it is making 68 of its 130 staff in Monaghan town redundant.
It is to cut costs after the milk plant merged with LacPatrick Dairies in April.
Matt Carthy says it is a "huge blow" for the workers and their families.
"It is also a significant blow to the Co. Monaghan economy that depends so heavily on indigenous employers due to the failure of state agencies to promote this county to outside investors," said Mr Carthy.
"The decision is particularly galling as many of us, as elected representatives, cautiously supported the recent merger between LacPatrick and Lakeland Dairies on the basis that these jobs could be saved.
“We now need all state agencies, and the Minister with responsibility local TD Heather Humphreys, to outline any advance detail of these losses before this announcement and of any actions they intend to take to save any of the jobs affected now."
Mr Carthy said that the government needs to instruct all State agencies including the IDA to prioritise County Monaghan for outside investment.
He said that it is imperative that the workers are provided with all necessary supports.
"We will be watching closely to see the packages provided in any redundancy terms."