Premier Foods, the maker of Oxo stock cubes and Mr Kipling cakes, has announced plans to close a plant in the West Midlands, putting more than 300 jobs at risk.
Premier Foods said on Thursday morning that the site in Knighton, which straddles the border between England and Wales, had become unprofitable and would be shut by the middle of 2023.
The company is currently in negotiations with staff working at the factory, which predominantly makes powdered drinks.
The move will cost the business about £10m, Premier Foods said.
“It is recognised that this will be an unsettling time for those c.300 colleagues who are potentially affected by these proposals, and they will be fully supported and consulted with throughout the process,” the company said in a statement.
The announcement comes on the back of successive quarters of strong financial results for the company.
In the final three months of 2022, Premier Foods saw group sales rise by 12% compared with the previous year, with grocery sales up by 17% and international sales up by 10%.
Before that, Premier Foods had enjoyed three successful years thanks to increased consumption during the pandemic, rewarding shareholders with a 20% increase in dividend payouts in 2022.
Alex Whitehouse, chief executive of Premier Foods, said: “These results illustrate the continuing appeal of our portfolio of market-leading brands in such a challenging environment and demonstrate the strength and resilience of our branded growth model.
“Our major grocery brands produced a particularly good set of results for us, continuing to grow faster than the market. Across the country, people got cooking again this Christmas.”
Premier Foods employs more than 4,000 people operating from 15 sites across the country, supplying retailers and wholesale with brands such as Bistro, Ambrosia, Bachelors, Loyd Grossman, Oxo and Sharwood’s.
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Mr Whitehouse said the company had been dealing with higher costs due to inflation, which continued to persist.
“Input cost inflation remains at elevated levels, and we continue to take action to offset this inflation through a range of measures,” he said.
“With strong trading momentum as we enter our final quarter of the year, and with more brand investment and new product launches to come, we are well on track to deliver on expectations for the full year.”