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One of the biggest employers in the Matamata-Piako district is closing as it cannot comply with conditions to restrict smells coming from its mushroom producing operation.
NZ Mushrooms in Morrinsville, which employs more than 160 people, has for years come under pressure from neighbours and Environment Waikato over offensive smells.
It was fined $32,000 last month for not controlling smells from a site where bulk chicken manure, hay, lime and water are composted.
Parent company Meadow Mushrooms said today the cost of complying with conditions to stifle the offensive smells meant continuing the operation was not viable.
About $2 million has reportedly been spent since 1995 on trying to suppress the odours and meet consent requirements.
Meadow Mushrooms chief executive Roger Young said another $2 million would be needed and there would still be no guarantee of getting a successful result.
The company hopes to negotiate being able to close in a phased process between now and the end of 2010, but the Environment Court could force a more immediate closure.
Matamata-Piako Mayor Hugh Vercoe said the mushroom farm started over 50 years ago and ran for many years as a family business before being sold to Christchurch-based Meadow Mushrooms.
It was a large employer and he said while a pending closure was not out of the blue, it came at a bad time.
"There are possibly other jobs here, but this is not the economic climate when those other employers are looking at taking on extra staff, that's the sad thing about the issue," he told NZPA.
Mr Vercoe said a composting site about a kilometre out of town was the root of the complaints, as opposed to the long-established growing operation in town.
He said the composting site had been where it is for longer than some of the residents on lifestyle properties nearby.
However, the court had ruled on the offensive odour and the company had no option but to comply and try and work towards an orderly closure.
"The court have made the ruling and we can't interfere with that.
"However, I would support a phased close-down as opposed to shutting the doors all at once," Mr Vercoe said.