350 jobs at risk at 2 Sisters Food Group's Merthyr plant

St Merryn Foods has been in Merthyr since 1999 and employs 1,100 staff

A food retailer is proposing to cut 350 jobs at its meat processing plant in Merthyr Tydfil.

The 2 Sisters Food Group is proposing to move the retail packing department from its St Merryn operation in south Wales to its site in Cornwall.

"It is the only way our business can survive and prosper for the longer term," a statement from St Merryn said.

The Welsh Government and the local MP are in talks with the company.

St Merryn, which was taken over by 2 Sisters Food Group in 2013, packs steaks and chops at the Merthyr site it has run since 1999.

The Welsh Government and Merthyr Tydfil and Rhymney MP Gerald Jones are to work with company directors during a 45-day consultation period.

'Huge blow'

"In total there are about 1,000 staff at the plant, so we are talking about a third of the workforce," said Mr Jones.

"It's a large well-established employer and this a devastating blow to the local community if this change goes through.

"If you think about Merthyr Tydfil and the wider community, some of the areas of depravation, to lose this amount of jobs would be a huge blow."

The plant received £1.2m of support in May 2010 for processing equipment from the Welsh Government's single investment fund before the operation was taken over by 2 Sisters.

Analysis: Brian Meechan, BBC Wales' Business Correspondent

That such a long-established company is set to lose a third of its workforce in Merthyr is a terrible blow for the staff, but it also has a knock-on impact in the wider economy which will affect many others.

The town has had a series of positive announcements recently as its regeneration strategy seemed to be paying dividends.

Two-hundred-and-fifty highly skilled jobs were created by General Dynamics at its tank assembly plant and exhaust maker, Tenneco Walker, took on 200 people.

Trago Mills has also started work on a retail centre that will employ 400 people.

The news of 350 job losses at 2 Sisters is a blow to the progress that was being made.

"The announcement made this afternoon gives significant cause for concern for those staff working in the company's retail packing operation in Merthyr Tydfil," said Economy Secretary Ken Skates.

St Merryn Foods, which currently employs 1,100 staff at the site on Penygarnddu Industrial Estate, confirmed the job losses were part of a "wider strategic review" and could happen as early as January.

'Fiercely competitive'

"We do not take the decision to launch this review lightly, but it is the only way our business can survive and prosper for the longer term," the statement said.

"Regrettably, the red meat sector in the UK faces many serious challenges including declining markets, falling volumes, higher input costs and a fiercely competitive retail landscape.

"This extremely difficult environment means the packing operation at Merthyr, which includes the packing of steaks and chops, is no longer sustainable.

"Our main focus now is to begin discussions with our colleagues to explore every available option to mitigate the potential loss of this function, which will include seeking relocation and redeployment opportunities elsewhere in the group.

"This decision does not impact our beef and lamb slaughter and cutting operations and these will continue to operate as usual at Merthyr Tydfil. The site will continue to employ up to 700 colleagues."

Nick Ireland, food union Usdaw's divisional officer, said: "This proposal will be devastating news for the loyal and hardworking staff at the Merthyr Tydfil site, especially so in the run up to Christmas.

"Usdaw will be doing everything we can during the 45 day consultation process to look in detail at the proposals with a view to safeguarding jobs, maximising future employment at the Merthyr Tydfil site and securing the best deal possible for staff."