Does the pull of Mars affect York? Business Editor RON GODFREY reads the choccy runes.

DOES the chocolate exodus trail inevitably lead to Eastern Europe and other countries?

People who work for Nestl Rowntree in York understandably have the jitters - spooked by Mars.

The chocolate bar company Mars is to axe 700 jobs in Britain, mostly at its offices and two plants in Slough, and switch much of its manufacture to Poland, the Netherlands and Germany.

How similar is that to the recent closure of Terry's of York, with the loss of all 316 jobs when owner Kraft Foods announced that it was transferring production to other factories in Sweden, Belgium, Poland and Slovakia?

Could the mighty Nestl and its York factory, which has been at the heart of the city's economy, be vulnerable too?

After all, multinational corporations are, in the final analysis, no respecters of local jobs and proof of the pudding is in the sacking.

Remember Samsung Heavy Industries? Back in November, 1997, only two years from the day that the Koreans set up their mighty plant at Flaxby Moor, near Knaresborough, board members back in Soeul decided to pull out, costing our region 86 jobs.

It came less than two months after Samsung had issued a statement committing itself to its European outposts. Such fickle behaviour was blamed by analysts at the time on the strengthening pound and the cheaper labour costs in Korea itself. Does that sound like a familiar tune?

And just as suddenly, American company Trinity Thrall closed its wagonmaking plant, Thrall Europa, at Holgate Park, York, when it ran out of orders in 2002. The sadness of the loss of more than 200 jobs was in stark contrast to the wild fanfare and civic welcome - and cash help - given to this venture which brought new hope since the traumatic closure of ABB carriagemakers on the same site a couple of years earlier.

In this case, Thrall decided to concentrate instead on operations in - guess where? - Eastern Europe and Germany. For the same reasons, ledger book logic triumphed over loyalty once again.

So, could Nestl follow the same pattern? After all, the price of cocoa recently soared through the roof along with increasing packaging costs and, as with the whole confectionery industry, Nestl has had to face the effects of strong sterling on labour and other costs.

The answer is "decidedly not".

A spokesperson for Nestl said: "At the moment, there are no plans to move anything made in York elsewhere."

But there is no reason to disbelieve Nestl's determination to keep York as a powerful manufacturing base.

Over the past five years alone, Nestl has invested £115 million in its production in the UK, £75 million of that on its York factory, which remains its biggest factory on the planet.

Top analysts like David Liston, of London investment management company Gerrards, and an expert in the food and beverage sector ,agrees that neither Nestl nor its huge rival Cadbury's are likely to go the same eastwards way as Mars or Terry's.

Nestl, he said was a global company, financially strong enough to resist the vagaries of cocoa prices (which have since eased) and increased packaging costs. Its policy was to increase market share against Cadbury as the Number One player in the British market, rather than restructure.

"You can't compare Nestl with Mars, which is a private, unquoted company whose management has not been as strong; or with Terry's Suchard whose position in the market place is not very strong. They are owned by Kraft which has been beset by its own financial problems.

Updated: 09:38 Wednesday, March 16, 2005