Some 2,700 workers at Hershey Foods Corp. are out on strike after union representatives and management failed to negotiate a settlement last week.

The dispute arose over the terms of a four-year employment contract that expired last November. The workers, who represent nearly 20% of the company's workforce, are claiming the necessity for healthcare co-payments, salary increases and retroactive wages.

The strike is the first in more than two decades, and only the fifth in its 97-year history. It has shut down production lines at two near plants near Hershey headquarters. The plants together account for approximately one quarter of Hershey's total output.

Hershey's shareholders' meeting is to occur here tomorrow and is likely to focus heavily on the issue. The strike could hit production of the traditional Halloween products, which ship in the summer months. Many of the striking workers, some of whom have never attended a shareholders meeting, said they plan to show up and have their opinions heard.