The Pensilva distribution depot run by Muller Wiseman in Cornwall could close, with the loss of 58 jobs.
The firm, which last week cut the milk price it pays to farmers, blamed changes in the marketplace, with most milk now being delivered in bulk to central depots for distribution by supermarkets rather than delivering straight to stores. It said less milk was also being delivered from Pensilva.
Muller Wiseman said it will "work closely with employees and union representatives at the depot during the 30-day consultation" and raised the possibility of some workers transferring to its depot at Bridgwater.
In a press release yesterday, the business "underlined its intention to maintain its service to customers in Cornwall and Devon using its dairy and depot infrastructure in the South West of England regardless of the outcome."
It said the change would not affect dairy farmers.
Carl Ravenhall, managing director at Müller Wiseman Dairies said: "We must adapt to changes in the market which we serve.
"Many individual stores continue to look to us to supply them with milk every day, but some customers now manage distribution themselves using regional distribution centres.
"We operate in a very competitive environment and it is right that we properly review the viability of this depot, taking the views and ideas of our employees and their representatives into account."