Northern Foods to close Swansea factory

"Mutually agreeable terms could not be reached and as a result, we have reluctantly decided to terminate the existing supply business," said Leeds-based Northern Foods, which also makes Goodfella's pizza and Fox's biscuits.

"Accordingly, we will be commencing consultation with employees on a proposal to close the site."

Northern Foods said its 2009-10 results would include a non-cash exceptional impairment charge of about 16m as a result of the decision.

It bought the factory in 2007 but said recent negotiations could not secure a viable return.