Finsbury Food Group is planning to close premium baked goods business Grain D’Or, with the potential loss of 250 jobs.

Based in Brent, London, the business supplies own-label products including pastries, American muffins and speciality breads to retailers and foodservice customers. It is a major importers of Normandy butter – a key ingredient in its croissants – and one of the UK’s largest importers of Canadian blueberries

Grain D’Or, described by Finsbury as “balancing automation with hand-craft skills to produce premium products”, has operated at a loss for some time.

And despite bids to improve the business – including tight cost controls and the introduction of new working practices – Grain D’Or has continued to do so, said Finsbury.

In the 12 months to 1 July 2017, Grain D’Or produced an overall operating loss despite generating £28.5m in revenue.

Finsbury is proposing to close the Brent site, and is launching a formal period of consultation with employee representatives including unions.

Last month Finsbury Food Group reported that declining prices had contributed to a 1.4% drop in UK bakery turnover across the business.

The business did report, however, that the decline in UK bakery sales had slowed from 2.9% in the first half of the year to a 0.1% increase in the second half. The company added that trading in the UK bakery division was stronger in the second half of the year versus the full 2016 financial year as prices had started to rise again.

Grain D’Or was part of the Fletchers Group of Bakeries acquired by Finsbury Food Group for £56m in 2014. Foodservice business Kara was also acquired by Finsbury in the deal.

In 2013, Fletchers undertook a £4m expansion of the Grain D’Or manufacturing facilities, converting three industrial units into a “state-of-the-art bakery facility and dispatch centre”.

Finsbury said none of its other businesses are affected by today’s announcement.