Dunbia has said it will continue to source Welsh lamb and process it in Wales for Asda after becoming the supermarket’s sole lamb supplier.

Asda has received lamb from Dunbia for some years but recently switched all its lamb business to the company after terminating its contract with Vion-owned Welsh Country Foods on Anglesey.

The loss of the Asda contract prompted Vion to launch a 90-day consultation on the future of the site, which it said may have to close if the Asda business cannot be replaced, with the potential loss of 350 jobs. The move also sparked widespread concern in Wales over the future of the Welsh lamb industry and levy bodies such as HCC, which said it could end up losing £500,000 in levy fees if all of the lamb currently processed at Welsh Country Foods were to be processed by Dunbia outside of Wales.

Dunbia said all the lamb currently being sourced and processed in Wales by Vion would continue to be sourced from and processed in the country. 

Dunbia group managing director Jim Dobson stressed the company was committed to supporting the Welsh lamb industry. “We are now seeking to source lambs from all of Asda’s current producers, and we are keen to build our supplier producer base in Wales,” he said. “Dunbia has four main processing sites across the UK, including one in Wales, and is fully committed to supporting Welsh farming and the Welsh economy.”

He added: “This is a strategic decision by Asda that will allow us to work better together to develop a sustainable lamb supply chain for the benefit of both the producer and the customer.”

Following Asda’s termination of the Welsh Country Foods deal, Vion had sought to change the supermarket’s mind about the switch. Asda said it had reviewed the company’s challenges to the termination of its contract, but “unfortunately, our decision to end our supply relationship remains”.

A spokeswoman for the retailer added the decision was not taken lightly and stressed “our customers will still be able to buy Welsh lamb, which is raised on Welsh farms and processed in Wales, as we are moving our business to Dunbia, whose facilities are based in Llanybydder, Carmarthenshire”.

She added: “While we have decided to end our supply relationship with Welsh Country Foods, we look forward to working with Dunbia so we can continue to help support the Welsh lamb industry and its farmers.”

Vion is in the process of selling off all its operations in the UK.