KIT KAT and Rolo manufacturer Nestle Rowntree last night confirmed it was cutting 275 jobs in York and Newcastle, blaming energy costs and a competitive market.

The York-based company, part of food group Nestle, will make 234 redundancies in York and another 41 at its factory in Fawdon, Newcastle.

As reported in The Northern Echo yesterday, the company is undergoing a business review to keep costs competitive. Last night, it confirmed part of the review would include job cuts.

The company said: "The net effect of these market pressures means the organisation is falling behind in its competitive positioning and the ability to support its brands in the long term.

"Subject to consultation, a restructure is now planned which would regrettably lead to a reduction of around 275 permanent jobs."

The company said it was also transferring production of Munchies from York to Newcastle.

Nestle is asking for voluntary redundancies first, and workers will be laid off in phases from spring.

Paul Grimwood, managing director, said: "The proposed changes are about transforming our confectionery business so that it is fit for the future and is best able to meet the demands and requirements of the market in the 21st Century.

"The announcement is about building the long-term manufacturing future of these brands in the UK."

Nestle's York site, which manufactures Smarties and Kit Kats, employs about 3,000 people, with about 500 in Fawdon producing Rolos and Fruit Pastilles.

John Kirk, of the GMB union, said about 164 redundancies at York would be in the factory and another 70 in the head office.

He said: "I think this will provide job security for the York site because, over the last couple of years, they have been diversifying into different brands, and obviously that hasn't been the success it was going to be."