Nearly 350 jobs are under threat at Vion's Welsh Country Foods' lamb processing facility on the Island of Anglesey, after the manufacturer warned today (January 11) that it could be forced to close the business.
The firm has launched a 90-day consultation process with its unions - including Unite - and its workers. The news followed the decision of its key customer Asda "to consolidate its fresh lamb business with an alternative supplier".
Welsh Country Foods employs almost 350 staff, and is the major processing facility for Welsh lamb in North Wales, handling 640,000 lambs/year.
The plant was bought by Vion Food Group in August 2008, when it acquired the Grampian Country Food Group.
'Extremely difficult day'
Jose Peralta, md of Vion's red meat business, said: "This is an extremely difficult day for everyone at Welsh Country Foods following the decision by its key customer to de-list Welsh Country Foods as a supplier.
"We recognise the impact this decision will have on the local economy and the community in Anglesey. And we are currently in discussions with the retailer to establish if their decision can be overturned and if any steps can be taken to mitigate their decision."
A spokeswoman for Asda said: "Following a strategic review of our lamb business, we have taken the decision to serve notice on our supply relationship with Vion-owned Welsh Country Foods, Gaerwen Anglesey. This decision was not taken lightly, however we feel it is an opportune time to review our lamb sourcing to meet the changing needs of our customers.
"We have built a strong relationship with Welsh lamb farmers and we remain committed to sourcing lamb from the country."
Peralta pledged to explore every opportunity to limit potential job losses. That would include attracting new customers to the site or the sale of the business to any interested parties.
But he warned that if the consultation exercise does not reveal a viable way forward, the firm would have no other option but to close the site.
Peralta also promised to work with the firm's farmer supply base to minimise any impact this may have on their activities.
The firm said it had informed the Welsh Assembly, Welsh Government, and Isle of Anglesey County Council.
President of the Farmers Union of Wales, Emyr Jones has written to Alun Davies, deputy minister for agriculture, to express his concern about the closure of the processing business at Gaerwen.
'Severe blow'
"In addition to representing a severe blow for the local economy and the 350 members of staff working at the plant, the announcement has wide-ranging repercussions for the Welsh food and farming industry as a whole, and could have a major knock-on effect on the marketing of Welsh produce by Hybu Cig Cymru, due to reduced levy payments in Wales," warned Jones.
He urged the Welsh government to do all it could to avoid the closure of the business.
Vion UK, part of the Netherlands-based VION NV, employs almost 8,000 staff at 30 facilities across the country producing and processing beef, lamb and chicken.
In November the Dutch firm revealed that it planned to quit the UK food sector , putting 13,000 jobs at risk.
But last month about 4,000 jobs were safeguarded when Vion agreed a management buyout of its UK pork operations.
The new venture, backed by private equity firm Endless, was led by Seamus Carr, md of Vion's Pork Business Unit. The business had "a strong track record of investing in companies in the UK across a wide range of sectors", claimed Vion.
