Brace’s Bakery is to scale back its logistics operation, with the potential loss of 37 jobs.

The Welsh plant baker said supermarket chains increasingly wanted to handle products though regional distribution centres, which meant it had renegotiated contracts with some of its big customers. MD Mark Brace said: "We’ve had to calculate the cost benefits, and their requirements, to form a change in our policies, and reduce some of our distribution work."

This means the delivery site in Crumlin, which transports products to customers around South Wales and the west of England, will need up to 20 fewer vehicles and 37 fewer staff.

Brace said the company would still deliver to smaller independent and branded shops, keeping on between 80-90 distribution staff and 50 vehicles ditching mainly the heavy-duty articula-ted lorries. He added: "We have to respond to the demands of our customers and, for those who already run a distribution service, it makes environmental and economical sense for them to collect their goods directly from us to cut down food miles and transport costs."

A consultation period with those workers affected has begun and while Brace said the decision was a difficult one, he hoped the company would be able to increase its workforce through manufacturing growth. Brace’s employs 330 people and is currently recruiting production staff as volumes are increasing.

The firm supplies a range of bread and morning goods including Brecon Baps and Jam Welsh Cakes.