Northern Foods to lose 550 jobs

Northern foods, the Fox's biscuits and Ski yoghurt food producer, is set to close two cake factories in Swindon with the loss of 550 jobs.

Northern foods, the Fox's biscuits and Ski yoghurt food producer, is set to close two cake factories in Swindon with the loss of 550 jobs.

Northern, whose biggest customer is Marks & Spencer, acquired the factories when it bought the R&K Wise cake making business last month for £0.5m plus £4m of debt. R&K makes cakes for M&S in the chilled and room-temperature categories.

Northern wants to move production to its factories in Bolton and Oldham but does not expect many of the Swindon staff will choose to move. It will set aside £6m in its full-year accounts to cover the cost of the closures. One of the factories is likely to close before Easter, with the other shutting later next year.

Northern said its business with M&S was "growing well"; it supplies the high-street retailer with convenience foods.

The comments came as Northern Foods reported a 2 per cent increase in half year, pre-exceptional profits to £42m. The company made a £12.6m profit on the sale of its Irish food distribution business in June.

Northern supplies two-thirds of its output to M&S, Tesco, Sainsbury's, Asda and Safeway. Sales to these five customers rose by 5.5 per cent on last year on an underlying basis.