The company, which is based at Glanyrafon Industrial Estate in Aberystwyth, Wales, would not confirm how many jobs had been affected, but did acknowledge the lost contract.
“Tesco has regrettably chosen to remove the Rachel’s yogurt range from the end of April 2015 and our staff have been informed of this decision,” said a spokeswoman for the company.
“As a result, we can confirm that we are now in a 30-day consultation period regarding potential redundancies and reduced hours at the Aberystwyth factory.
“As a business, we are currently focusing on replacing the volume lost from Tesco and we are doing everything in our power to minimise the impact on Rachel’s consumers and employees.”
Rachel’s was last hit by job losses in 2012 as part of its integration into the Lactalis Group, having been acquired by Lactalis Nestlé Chilled Dairy in 2010.
Not officially disclosed
The exact number of redundancies was not officially disclosed at the time, when an estimated 150 people worked at the factory, although one local press report claimed 45 jobs had been hit. It is now believed that the Aberystwyth plant employs 92 staff.
In addition to yogurt, Rachel’s produces a range of dairy-based organic foods, including desserts such as rice pudding, milk, cream and butter.
FoodManufacture.co.uk understands Rachel’s products will remain available at Asda, Morrisons, Sainsbury, Waitrose and Ocado.
On April 22, Tesco reported a record pre-tax loss of £6.38bn for its financial year to the end of February, with group sales down 3% to £69.65bn.
News emerged in January that the supermarket giant was planning to reduce the number of its SKUs by 30% to enable it to simplify ranges, cut prices and improve availability. Kingsmill bread has been the highest profile casualty so far.