FOOD firm Nestle is in talks to sell its UK-based ice-cream business in a move which is likely to result in job losses in the region.

The group is in discussions with Richmond Foods, the country's largest manufacturer of ice-cream products, about a possible deal.

But bosses at Richmond have warned that the takeover could result in "substantial redundancies" among the 230 Nestle staff in York and Telford.

The move would give Richmond Foods, at Leeming Bar, near Northallerton, North Yorkshire, the right to manufacture, import, distribute and sell Nestle's ice-cream range in the UK.

Nestle said the formal process of consultation would begin early next week, and that, in the event of redundancies, the firm would work with Richmond to provide a strong level of support for employees.

Workers in the Nestle ice-cream business would transfer to Richmond Foods with their current terms and conditions.

The company's manufacturing operation is based in Telford, while 84 people work in the sales, marketing and administration centre in York.

Nestle group finance director, Graham Millar, said: "We have tried hard for nine years to develop our ice-cream business, but have not been able to make it big enough to compete in a difficult and competitive market place.

"We are, therefore, seeking a solution that preserves the hard work that has gone into building our brands.

"Combining with Richmond should create a large enough business to compete effectively.

"Richmond has considerable expertise and will give our brands the best chance to continue their development."

A spokesman for the Transport and General Workers' Union said: "We do have members at Nestle in York and will be seeking urgent clarification of the situation there."

Earlier this year, Richmond announced plans for a £4m extension to its site on the Leeming Bar industrial estate, which would create the biggest ice-cream factory in Europe.

A spokesman for Richmond Foods said yesterday that a further announcement about the deal with Nestle would be made shortly