Davidstow Creamery's permit could be revoked by the Environment Agency after pleading guilty to 21 environmental crimes at the site in December.
According to the Daily Mail, the government's environmental body may revoke the creamery's permit for polluting the river and killing "serious" amounts of fish.
The publication reported that Queen Elizabeth also enjoys food made by the factory, which is the only cheddar producer in the country.
It said the creamery was being investigated by anti-pollution group Fish Legal.
Speaking to the newspaper, Geoff Hardy, the group's lawyer, said, "This case could serve as a warning to the highly profitable industrial processors in our rural areas."