An Irish dairy authority has been accused of protectionism after some Northern Irish milk processors found themselves unable to sell south of the border.
Many retailers in the Republic are requiring Ireland's National Dairy Council (NDC) label guaranteeing milk was produced in the State when sourcing supplies.
Because Northern Irish processors do not have that guarantee, contracts have been lost, including a major Dale Farm bid to supply Superquinn.
This week, a container had to be sent from Omagh to a show in the Midlands after processors refused to buy milk taken from northern cows at the venue.
Cormac Cunningham, who helps run family business Strathroy Dairy in Omagh, said: "We see it as long-term potentially very bad that on a small island like this, protectionist policies are being pursued."
Stormont enterprise minister Arlene Foster said the practice could contravene the principles of the European single market in goods like milk.
"Northern Ireland and the Republic of Ireland are food-exporting regions and neither can afford to be protectionist," she said.
"If the campaign were to be replicated in Great Britain, excluding product that was not produced and processed in the UK, it would cause immense problems for the food industry in the Republic of Ireland."
The Dale Farm Group supplied milk to Superquinn until recently, but was excluded from tendering for that business following a decision by the retailer that supplies must meet NDC specifications - produced and processed in the Republic of Ireland.
The Dairy Council is an industry representative organisation which aims to promote consumption.
In September 2009, it introduced a packaging mark giving consumers in the Republic of Ireland the "reassurance" of knowing that if they bought milk or cream with the NDC guarantee, it was farmed and processed locally.
"The NDC guarantee gives consumers the opportunity to show their support for local jobs on dairy farms and in the dairy sector in an active way, when deciding what milk or cream to buy," the organisation's website said.
"Research from 2011 shows that consumers here have become very engaged in the jobs debate since the recession, with 31% saying they are buying more Irish food and drink brands, and, when asked why - 90% are saying they want to support the economy and jobs.
"The NDC guarantee directly supports the jobs of 2,483 people locally in dairies and 2,193 dairy farmers involved in farming table milk."
Some Irish food firms have highlighted local sourcing of product after a recent meat contamination scandal.
Ms Foster said the Republic was denying Northern Irish dairy producers the right to sell.
"I am concerned that the NDC campaign is a contravention of the principles of the single market," she added.
"I believe that the campaign is a misuse of country of origin labelling.
"It discriminates against consumers in the Republic of Ireland, who are being denied the additional choice and benefits of market dynamics that product from Northern Ireland would provide."
The Dairy Council for Northern Ireland is threatening to take action in the European courts to stop the campaign.
Ms Foster added: "I welcome that approach and will offer support in addressing the anti-competitive stance of the campaign."