Confectionery giant Nestlé may stop manufacturing its products in the UK in a row over pensions.

Nestlé claims that the group has been told by the Pensions Protection Fund that it could pay as much as £700m a year. It had been expecting £300m.

“It is our belief that if UK labour costs for any manufacturer get out of line because of increased costs, including pension provision, this could result in jobs being moved to more competitive locations,” the company said.

“It would also cause companies to reconsider their current pension scheme offerings, which could lead to further scheme closures,” it added.