Supermarket giant Tesco has categorically ruled out selling beef from animals born in the Republic and fattened for slaughter in Northern Ireland – after claiming shoppers find mixed-origin meat confusing.
The news will come as a huge blow to farmers devastated by plummeting beef prices and the erosion of the traditional north-south trade in 'nomad' cattle.
Last night the situation was branded "nonsense" by an Ulster Unionist MLA.
Only 6,000 young cattle have been exported to Northern Ireland for fattening this year compared to 40,000 a few years ago.
That is because in the aftermath of the horsemeat scandal many UK supermarket chains are now refusing to sell beef that has more than one country of origin on the label.
Farm organisations have been calling on the Republic's Agriculture Minister Simon Coveney to persuade UK supermarkets to start taking mixed-origin beef again, in a bid to ease pressure on cattle farmers.
However, a letter from Tesco makes it clear it has no intention of doing so.
One of Tesco's most senior executives wrote to Fine Gael MEP Mairead McGuinness in recent days saying that though it was proud to sell beef that was either from Northern Ireland or the Republic, it would not be selling beef from animals raised in both jurisdictions.
"Our research consistently tells us that customers want products that come from simple supply chains that are easy for them to understand, and are clearly labelled," wrote Tesco group commercial director Kevin Grace.
"I understand this may not be the response you were hoping for but can assure you we will continue to work with beef producers from Northern Ireland and the Republic of Ireland as part of our sustainable beef supply," Mr Grace added.
Ulster Unionist MLA and farmer Tom Elliott urged Tesco to reconsider its decision.
"The Tesco excuse is an absolute nonsense," he told the Belfast Telegraph.
"Tesco seem to trust Irish beef, and they seem to trust UK beef, whether it's from Northern Ireland or GB.
"If it's born in one country and then finished in another, within Ireland and the UK, what is the difference?"
Mairead McGuinness said Tesco's response was "emphatic and regrettable".
She challenged Tesco to reveal details of its research into consumer preferences.
"There has been a long tradition of farmers from Northern Ireland sourcing quality young cattle in the south for finishing on farms in Northern Ireland. It is an important part of the beef business," she said.
"However the decision of major buyers like Tesco to refuse to stock this beef has a direct knock-on negative impact on farmers north and south," she said.
The Irish Cattle and Sheep Farmers Association has also questioned Tesco's research into beef from so-called 'nomad' cattle. Its general secretary Eddie Punch said that Italian consumers had no problem understanding the mixed-origin labels on beef from cattle raised in Ireland and finished in Italy.
Beef prices to Irish farmers are down 17% this year, although its retail price is down just 0.6%.