Cwmni Cig Mon, one of the largest lamb abattoir operators in Wales, has called in the receivers and laid off about 100 workers.
The company, which is based at Llangefni on Anglesey, is the second north Wales meat company to close in two months.
Farming unions are still struggling to get details of the amount of money owed to lamb producers.
“We urge the receivers to give payments for stock the highest possible priority, and make every effort to ensure that the plant remains a key buyer of locally produced lambs,” said Farmers Union of Wales president Gareth Vaughan.
The union fears that some producers who are still owed money after the closure of nearby Cwmni Cig Arfon in Caernarfon in
March have been hit again.
Less than two years ago Cig Mon closed its abattoir at St Asaph in Denbighshire and transferred the work to its mothballed Llangefni plant.
At the time, managing director Owen Owen told Farmers Weekly that extremely tough trading conditions had forced the
company to restructure its financial arrangements.