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Northern Foods to cut 300 jobs

NORTHERN FOODS, one of the leading food suppliers to Marks & Spencer, Tesco, Sainsbury's, Asda and Safeway, yesterday announced the loss of 300 jobs in a pounds 30m investment and restructuring programme.

In Nottingham 135 jobs will be lost and a further 160 are to go in Milton Keynes. However, 170 new jobs will be created in Manchester and other sites.

Northern is investing pounds 20m in the programme over the next 12 months and also expects to incur restructuring costs of pounds 10m, half of which will include a cash outlay to cover redundancy costs.

Matthew Gribbin, group executive at Northern Foods, said the restructuring reflected a positive investment climate and was the result of increased demand for quiches, pizzas and sausage rolls.

"It's obviously regrettable that in this situation there are going to be job losses but it's a positive investment story. These markets are growing because people want to buy more pizza, quiche and sausage rolls. As these industries grow, we can justify investments which automate the work a lot of people do," he said.

Northern, which employs 20,000 people around the UK and is chaired by the Labour peer Lord Haskin, will improve productivity for Tesco by transferring quiche production to new facilities in Manchester.

Analysts said the restructuring was expected and was sensitive politically rather than financially. One said: "It's one of those things that's politically and personally more difficult and things won't be any easier going forward with continued pressure in the industry."

He added that the arrival of Walmart on the UK scene will inevitably lead to "more restructuring and more and more focus on productivity".