Councillors at the Garioch Area Committee have refused ANM Group’s plans for a £4 million expansion of Thainstone Business Park.
The shock decision was made at Tuesday’s meeting in Inverurie.
The planning proposal had included an extension of the existing Thainstone Mart and business park enhanced with the addition of new office buildings and parking.
Around 500 jobs were due to be created as ANM Group pledged to hire local suppliers for the development.
Work was scheduled to begin on site later this year and the extension would have been completed in 2018.
Following the decision Pat Machray, ANM Group chairman, said: “We are deeply disappointed with the outcome of the decision regarding the extension of Thainstone Business Park.
“This is obviously not only a setback for us, but for the whole of Inverurie and the North-east agricultural industry.
“A great deal of time and money has already been invested with the long term intention of boosting the local economy, and this £4 million investment was an integral part of our future plans.
“We have been a major employer and contributor to the North-east economy for more than 140 years, and as a farmer-owned co-operative, we have and will continually strive to improve the business to provide the best service for our 5,000 members and 20,000 customers.
“It is our intention to consider our options.”