Del Monte Fresh Produce’s factory in Skelton, York is facing closure following the loss of a major contract with Morrisons.
The high-care prepared produce facility making leafy and wet salads had some £16 million of business with the Bradford-based retailer.
However, that contract is not being renewed and the remaining supply deals - understood to be worth £3m - are said to be too small to allow the factory to be kept open.
The York facility produces lines such as coleslaw, potato salads and other dressed products.
Sam Vickers of the Bakers, Food & Allied Workers Union, which has a recognition agreement with Del Monte said: “The company has £16m of orders with Morrisons. If it does not get any more business in the next two weeks or so, it will have to close on 29 April.”
He added that the union had met with Del Monte management this week but was not optimistic the factory would be saved.
The union has some 20 members at the factory, which employs 140 permanent staff.
Del Monte Fresh Produce (UK) would not comment on the future of the factory, but it is understood it is looking to put business into other retailers.
Morrisons confirmed to FPJ it had switched suppliers. “Following a comprehensive product review process that included Del Monte, we took the difficult decision to award the contract to another supplier,” said a spokesman.
The supermarket would not confirm who the new supplier was, but sources said there were only a limited number of UK players operating in that market.
“There are four or five major players all looking for volume because it’s a low margin business, much like fresh produce,” said one well-placed source.
“It’s a significant blow to Del Monte in this country.”
Morrisons has been in the spotlight recently as it is believed to be re-evaluating its supply chain.
It is understood to be putting more business via Global Pacific Produce, a company through which it is sourcing more directly.
The Del Monte situation follows that of English Village Salads, which is currently consulting with staff after losing a major contract with Asda.
In 2008, Taypack also came into difficulties after walking away from a reported £32m a year contract with Asda.
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