Ethnic foods supplier S&A Foods is to lay off a number of staff after losing a major contract with UK supermarket chain Safeway.

S&A Foods, which makes own label pre-packed meals for supermarkets, caterers and pubs in the UK and Europe, employs 1,300 people at its factory in Normanton, Derby.

"As part of its ongoing supplier rationalisation programme, Safeway has informed us the manufacture of its range of Indian chilled ready meals will be undertaken by other suppliers," a spokeswoman for S&A was quoted as saying by The Grocer.

"We have been undertaking a full review of our operations to ensure we remain competitive and efficient. As a result of this review, and Safeway's decision, we intend to restructure the business. Regrettably it is inevitable a significant number of jobs will be lost.

"The future for S&A Foods remains excellent, and we are already discussing new business opportunities with other customers," she added.