Senior resources manager Greg Hickey said demand in the Japanese market for its timber products had halved as a result of persistent public attacks on customers by environment groups.

As a result, he said the company would shed one shift (or up to 40 jobs) from both mills.

``Regrettably, Ta Ann Tasmania has no choice but to reduce production. The effects of this green campaign will also flow on to our suppliers, our contractors, our transport and freight operators and ultimately our communities,'' Mr Hickey said.

``This will also mean a temporary reduction of wood sourced from Forestry Tasmania by about a third until the intergovernmental agreement is concluded.''