Nestlé plans to close a confectionery site in Hungary, citing a “decline in demand” for seasonal chocolate products.

The factory at Diósgyőr in north-eastern Hungary will end production by the end of the year.

It manufactures chocolate hollow figures for the Smarties, KitKat, and Milky Bar brands.

According to the Switzerland-based food giant, demand has fallen in recent years, which has led to output at the site dropping “significantly”.

The plant contributes less than 3% of Nestlé's revenue in Hungary and under 1% of its domestic manufacturing volume, it said.

The facility opened in 1962 and joined the Nestlé network in 1991.

Alongside supplying the local market, the site exports to more than 20 countries, a Nestlé spokesperson told Just Food.

The company said it has begun talks over the sale and future operation of the factory and will share details on the outcome at a “later date”.

Nestlé said it wants to transfer the plant to “an investor who wishes to continue confectionery production”.

It did not specify how many jobs could be affected.

The aim, however, is to transfer "as many colleagues to the new owner as possible", the spokesperson added.

The company also assured its hollow chocolate products will continue to be sold to consumers. Production is moving to a co-manufacturer in the UK.

Nestlé has its Hungarian headquarters in Budapest. The company also operates a regional beverage plant in Szerencs and a Purina pet food factory in Bük.