FOOD company Nestle may cut jobs at its factory in York as it struggles with falling sales of Kit Kats.

Novelty flavours such as Christmas Pudding, Strawberry and Cream and Lemon and Yoghurt Kit Kats are blamed for the drop in sales of Nestle's core brand, which is made at its Wigginton Road factory.

The Swiss company, which employs about 3,000 people in York and a further 500 at a factory in Newcastle, said yesterday it was carrying out a restructuring exercise in its confectionery business.

A spokeswoman said: "There is essentially a business review going on within the UK confectionery business, as a result of the UK market becoming fiercely competitive.

"The results of the review will become public soon, but in terms of what is in the review, we are not being specific.

"It is over and above the fact that the Kit Kat share of the market fell by 0.5 per cent last year."

John Kirk, the GMB union official for the York site, said he was aware of a business review.

"We know they are looking at restructuring," he said, "but as yet we don't know what their proposals will be.

"We hope to find out soon, but it could involve job cuts.

"I think there is uncertainty in manufacturing generally at the moment, with people struggling with high energy costs, and it is bound to happen at Nestle as well, because energy prices have doubled everywhere.

"Having said that, I am not concerned about the future of the factory at York, as they have got an excellent core business there."

Kit Kat's share of the UK sweets market fell to 3.5 per cent last year from a historical average of four per cent.

The 70-year-old brand is iconic, with about 20 million sold each week.