A Donegal fish-processing factory run by supertrawler owner Mr Kevin McHugh has closed with the loss of 16 permanent jobs.
Some 40 seasonal staff will also be affected by the decision to shut down Polar Fish Ltd in Killybegs.
A spokeswoman for Mr McHugh said the staff had been laid off due to problems with supply of fish in the port. Other factories were also being affected by the shortage, she said.
Polar Fish was formerly owned by a group of pelagic (mackerel/herring) skippers in the port and was bought out by Mr McHugh last year.
Killybegs has been hit hard by new restrictions on mackerel landings introduced by the Department of Marine and Natural Resources. The Minister for the Marine, Mr Ahern, has said that the new rules were introduced to meet EU legal requirements.
In a separate development, the Minister has reached a compromise with a group of Killybegs vessel owners who took a legal challenge against the State over his new licensing policy.
The policy compelled the owners to match a shortfall in their vessels' tonnage capacity by purchasing tonnage capacity attached to smaller vessels in a different segment of the fleet.
The compromise allows for phasing in of gross tonnage and engine-power requirements. The deal has been welcomed by the Killybegs Fishermen's Organisation.
