About the quarter of the workforce at Silverspoon in Bury St Edmunds are set to lose their jobs after the firm lost a major contract with Asda.
The company has announced proposals to make about 30 redundancies out of the 118 it employs in Bury St Edmunds.
A further 10 jobs are under threat at its site in Peterborough.
A spokesman for Associated British Foods which owns Silver Spoon said: “I can confirm we did lose a large supermarket contract.”
That contract was with Asda, a major customer of Silver Spoon.
“It has had a disproportionate impact on the business,” the spokesman said.
In a press statement Silver Spoon said: ““The Silver Spoon Company Ltd has announced proposals to make changes to a number of operational areas within its business as part of a long-term competitive review.
“The Company is currently operating in an exceptionally challenging market place and needs to re-structure its business in order to adapt to the changing requirements of its customers.
“These proposals will affect a limited number of roles located across two business areas in Central Office, based in Peterborough, and at one of our production sites in Bury St Edmunds.
“These proposals do not relate to British Sugar’s wider production facility at Bury St Edmunds; and The Silver Spoon Company’s other sites in Bardney; Bishop Stortford; Aylesbury and Ipswich are likewise unaffected.”
Managing Director of the Silver Spoon Company, Martin Brewis said: “We are now undertaking a formal consultation regarding these proposals.
“We understand this will be a difficult period of time for some of our employees and their families; and will be working our way through a formal process to support those at risk of redundancy”.
The statement added: “We are actively looking for ways that we can minimise the impact of any job losses resulting from this consultation including exploring opportunities to re-deploy some of those impacted across the wider network of businesses owned by Associated British Foods.
“However, we have to respond proactively to changing market conditions and take difficult decisions that ultimately will ensure our business is on a sure footing for future success.”