ADM Milling blamed “unfavourable economic conditions” as it announced it is to close its Newcastle flour mill in May.

Marketing manager John Hastwell said the mill is a bulk-only site, with no packing operations and is operating under capacity.

Production will be shifted to ADM’s other mills, particularly those in Edinburgh, Scotland, and Knottingly, Yorkshire.

A consultation with some “20 or so staff” employed at the Newcastle mill started on February 10, Mr Hastwell said. They may be offered opportunities in other parts of the business.

“This is part of an ongoing efficency programme to help us compete in a difficult market,” noted Mr Hastwell. “A review has been ongoing for a number of months.”

Mr Hastwell added that increased energy costs – for oil, gas and electricity – had been a factor in unfavourable economic conditions experienced in 2005 and looked set to continue to pose a problem in 2006.

ADM Milling currently has 10 mills in the UK – two in Liverpool as well as sites in Tilbury, Avonmouth, Corby, Tewkesbury, Castleford and Edinburgh. No further mill

closures are expected, according to ADM.