Dutch food group Vion has said it may be forced to close its lamb processing business Welsh Country Foods due to the loss of its contract with Asda.

Vion, the troubled private-label pork producer that last month finalised an MBO deal for its UK arm, said Asda was a “key customer”, accounting for around 50% of the site’s business. As a result, the company said it may be forced to shutter the Island of Anglesey business, putting around 350 jobs at risk.

A spokesperson told just-food the company is in discussions with potential alternative customers and that this announcement is not a site closure but the start of a 90-day consultation.

“We recognise the impact which this decision will have on the local economy and the community in Anglesey and we are currently in discussions with the retailer to establish if their decision can be overturned and if any steps can be taken to mitigate their decision,” Vion’s managing director for red meat Jose Peralta said.

“Throughout the consultation process we will explore every opportunity to limit any potential job losses which will include attracting new customers to the site or the sale of the business to any interested parties. We will also work with our farmer supply base to minimise any impact that this may have on their activities.”

The plant was purchased by Vion August 2008 when it acquired the Grampian Country Food Group.

This wouldn’t be the first plant closure for the firm. Vion, which put its UK business up for sale last month, has suffered from over-capacity in the meat sector. As a result, in October, it confirmed plans to close its Hall’s of Broxburn processing facility. The company had attempted to find a buyer for the business but reached the decision to chutter it when it found none of the bids it received provided a “viable alternative”.