Nestl is to halt production of its latest product, the "Jekyll and Hyde" chocolate-covered pretzel Flipz, and lay-off 90 workers at its York factory.

The shock news comes just two months after the launch of the unusual confectionery snack - the York factory's biggest new product since the Yorkie 20 years ago - and within weeks of a new TV advertising campaign that is part of a £3 million marketing exercise for Flipz.

However, the company today denied its pretzel Flipz was a pretzel flop.

Union leaders, who described the move as a lack of foresight, were meeting management today to discuss the lay-offs.

Nestl said 130 people were currently working on Flipz - both the chocolate and white fudge versions. Ninety of the staff are on a casual contract which runs out on June 12.

It is these 90 staff who are to be laid-off when their contracts expire. The remaining Flipz workers will be moved elsewhere in the factory.

Nestl said it plans to resume production of Flipz in August, with a scaled-down staff of 45.

The firm said it needed a big staff to build up stocks of the product to tie-in with its launch. Now it is measuring what the natural market of the product might be before it resumes production of the Flipz.

Hilary Parsons, of Nestl, said: "We have not seen the full impact of our advertising campaign and it is too early to say what the long term sales are going to be. It has been successful so far."

Casual workers in the Flipz production unit were told last night they would be laid-off when their contracts ran out.

Terry Moore, deputy chief shop steward for the GMB union at the factory, today said: "We are obviously not very pleased. We have needed to find out whether or if these people can be found other jobs within the factory until production starts again."

One casual worker said: "This is very discouraging, everyone is unhappy, the unions are blazing. Everyone is very disappointed with the management.

"It is a farce. There are people who have just bought houses, just rented accommodation and this is sprung on them, just like this.

Nestle say they have send out 11,500,000 packs of Flipz to retailers - worth £4 million and that they are selling "in line with our expectations."

Since the advertising campaign began, sales have doubled.

And in Tesco and Sainsbury, Flipz are outselling the four-finger KitKat bar.

In newsagents and small shops which stock Flipz, it is proving the fourth most popular confectionery purchase.

Converted for the new archive on 30 June 2000. Some images and formatting may have been lost in the conversion.