A worker at a Müller factory in Bridgwater has died after contracting coronavirus and 95 others are self-isolating.
The company said of those self-isolating, 47 had tested positive for the virus.
The outbreak has affected nearly one-third of the workforce at the dairy in Market Way near North Petherton, Somerset.
The company said there was no risk to its products and that it was now testing every worker at the site.
In a statement, a Müller spokesperson said: “We confirm that 95 employees who work at our Bridgwater dairy are currently self-isolating, 47 of whom have tested positive for Covid-19.
“With support from Public Health England and the local council we are ensuring that the entire workforce at Bridgwater is being tested for the presence of Covid-19.
“As we have done throughout the pandemic, we are placing the safety of our employees first and following best practice as set down by the Health and Safety Executive.
“Standard measures in place include the use of face masks, distancing, enhanced deep cleaning and hygiene, underpinned by a programme of e-learning, information and audits to ensure compliance and awareness of the measures."
The spokesperson added: “It is important to stress that fresh milk processing is highly automated ensuring no risk to products, with our Bridgwater facility one of the most modern dairies in the UK.
“Notwithstanding this we have acted to reduce production at Bridgwater as an additional measure at this time, utilising our network of dairies to support.”
About 300 people have continued working around the clock at the dairy to produce and distribute fresh milk for the company, as they are classed as key workers by the government.
The site has since reduced production.