Staff at the Scunthorpe plant, which employs 600 people, were informed yesterday with the formal consultation period beginning today, said a spokesman.
Bosses at the site, which was well invested and highly efficient, were now “actively seeking new business to replace the lost volumes”, he said.
“This is an unfortunate but inevitable consequence of a strategic decision by Asda to opt for an alternative supply solution for their bacon and gammon business going forward, that will result in significant loss of volumes.”
While Vion had been in “intensive discussions with supply chain partners to mitigate the impact on the site”, there was no alternative but to restructure, he added.
However, Vion remained committed to ensuring the long-term sustainability of the Scunthorpe site, and would do “all that we can to maintain our core workforce”.
Asda: Vion remains a valued supplier
An Asda spokeswoman said Vion remained a "key and valued supplier for Asda across a number of fresh categories including chicken, lamb and pork".
She added: "Following a strategic review of our gammon and bacon business we have taken the decision to change suppliers.
"As a result we expect a significant number of new jobs to be created at two factories in Yorkshire, approximately 350 in West Yorkshire and a further 35 in North Yorkshire.
"The amount of product we source from British pig farmers is completely unaffected by this announcement. In fact we expect to increase the amount of British gammon and bacon we sell in 2011 when these changes come into effect."
Winners and losers
Asda's cooked meats supplier Forza AW has a large facility in West Yorkshire, but Asda declined to comment on whether it was the key beneficiary of its decision to switch bacon and gammon suppliers, adding: "That's just speculation. The business is going to be awarded to other suppliers, and we're in the process of signing those contracts now."