For two weeks, 145 workers have been locked out of their Kawerau workplace without pay.
And no end is in sight, with the company suspending a planned $15 million project as the employment impasse continues.
Pulp and Paper Union Kawerau union secretary Tane Phillips said a lockout at Essity mill had been in place since August 9.
Essity is one of the world's largest hygiene and health companies and its brands include Purex, Sorbent, Libra and Handee, the union said.
On August 9, the Bay of Plenty Times reported the union claimed the country's toilet paper supply could be at risk after Essity indefinitely locked out 145 workers, who called for an inflation adjustment as part of their collective employment agreement negotiations.
Phillips said three contracts were being negotiated on behalf of those employees.
"If they don't get CPI, they're going backwards," he said at the time.
Speaking to the Bay of Plenty Times this week, Phillips said the union was seeking pay increases in line with inflation and the rising cost of living. The consumer price index (CPI) June quarter increase was up 7.3 per cent on the year before.
While the company had offered an additional one-off payment in the first year of the three-year contract, he said pay rises in the other two years did not match expected inflation.
He said the union's position was based on analyst predictions of a 15 per cent total rise over three years.
Phillips said despite negotiations last week, "the company is not willing to move on the lockout".
He claimed the company was telling workers "they can't come back until they agree on the conditions and the pay the company has put in front of them".
Phillips said the union was trying to help workers "where we can" with food vouchers.
Roger Coffin, who has worked at the mill for 22 years, is one of the 145 workers locked out and is also a union delegate.
"A lot of the stuff that's been unfolding over the last couple of weeks - it's unprecedented. I've never seen it," he said.
"We've never been locked out."
Coffin said he was "fortunate" he had money saved "for a rainy day" and was getting by without pay.
But he was concerned about young employees and those who were new or on temporary contracts who "potentially wouldn't have had the ability to put anything aside".
He said a lot of the union's members wanted to get back to work.
"But they've got to get a lot better than the offer."
Essity claimed the union's wage increase demands for collective agreements would lead to a loss of investment and threaten local jobs.
Essity's wage offer was a 3 per cent increase in each year of a three-year agreement and a one-off cash payment, making the first-year payment equivalent to 8.3 per cent.
General manager at Essity's Kawerau site Peter Hockley claimed the company had "well-remunerated" employees, who were among the "highest paid working in manufacturing in New Zealand, earning nearly double the median weekly earnings of New Zealanders".
"We want to continue to offer great pay and conditions because it's good for employees, our business and the local community. Our wage offer maintains attractive conditions, addresses inflation impacts on employees and is more than fair and reasonable."
Hockley said the company had no option but to initiate a lockout to try and secure an agreement, after 19 days of strike action and continued wage claims that threatened the future of the site and jobs.
He said because of conditions created by the impasse, Essity had indefinitely suspended a major paper machine upgrade project that would contribute to the viability and future of the site.
The $15 million project would upgrade Essity's paper machine drying process to geothermal steam, delivering "world-first innovation".
Essity was trying to minimise disruption to customers and was committed to reaching an agreement that provided a fair and reasonable wage increase for employees and protected the future of its manufacturing operations in New Zealand.
Essity did not respond directly to comments made by Tane Phillips and Roger Coffin.