Health Minister Tony Ryall has rejected Labour Party claims that the Government is planning to close 50 hospital kitchens.
Labour said the move had been proposed by Crown company Health Benefits Limited (HBL), who were set up by the Ministry of Health to make savings in the public health service.
It said the plan would involve the outsourcing of the making of hospital meals and cost 1300 jobs.
Mr Ryall says HBL is consulting with unions on a proposal to streamline district health board food services but a business case could be six months away.
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"The health service is looking at how we can provide a better service with improved quality of food but in a more collective way, that saves money which can be ploughed back in to front line services.
"The vast majority of hospital kitchens are already contracted out to private businesses. I am told the consultation could see two or more major new kitchens providing food services across the country.
"That would result in a number of other hospital kitchens being downsized, but HBL says food quality would be maintained and improved.
"HBL believe they can save more than $10 million per year with the proposal and all of that money would be redirected back into frontline health services.''
Currently a third of hospitals make their own meals and deliver them to wards on-site
The rest of the kitchens are run by private contractors Spotless Services and Compass.