Up to 120 jobs are under threat at the Kraft Foods plant in Banbury after it sold off its Bird's Custard and Angel Delight brands.

Premier Foods has agreed a £70m deal with Kraft which will see production switched to Premier's plant at Knighton in Staffordshire within a year.

Kraft spokesman Jonathan Horrell said: "The company will be discussing with employees and their union representatives ways to support those affected by the announcement as part of the consultation process, including offering fair severance packages, where applicable, to affected employees."

Mr Horrell said that the Kenco coffee operation at the Banbury plant which employs about 1,500 people was unaffected.

A spokesman for the Transport and General Workers Union, which along with Amicus represents the workers, said the implications for the workforce were being studied closely by local union representatives.

He added: "We don't know what the exact details are but will make sure we are fully involved in the consultation process on behalf of our members."

The deal will boost Premier's portfolio, which includes Ambrosia custard, Branston Pickle, HP sauce and Typhoo Tea. Bird's is one of the UK's oldest packaged grocery brands and dates back to 1837 when Alfred Bird invented custard powder for his wife who was allergic to eggs.

It was acquired by General Foods in 1947 and has been part of Kraft since 1989.

In addition to Bird's Custard and Angel Delight, Premier will also take over ownership of other associated brands from Kraft.

Premier said the deal would enhance earnings and suited its strategy of acquiring "great British brands with leading market positions".

Premier chief executive Robert Schofield said: "The Bird's business with its high brand recognition is a perfect fit with our Ambrosia and other desserts brands.

"It will extend our product range in the desserts category and enhance our position as one of the UK's leading suppliers."

St Albans-based Premier employs more than 4,000 staff and has factories around the UK, including at Wisbech in Cambridgeshire and Long Sutton in Lincolnshire. Other brands include Sun-Pat peanut butter, Gale's honey and Waistline salad dressings and soups.