Bernard Matthews is to sell its sandwich production and van sales division to Kerry Foods in a bid to focus on its core business of turkey farming.
Kerry Foods is expected to take control of the £14m-sales Dunstable-based operation this weekend.
Bernard Matthews said it was selling the division to help secure its future as a sustainable business. It will also cut 90 jobs to fit the new business structure, post disposal of the sandwich operation. Redundancies are expected to mainly affect head office staff.
"We plan to focus our efforts back on our historical core business of turkey farming and production where we have a well-established and enviable reputation, and considerable experience," said Bernard Matthews.
"The sandwich division was established "in the misguided belief Bernard Matthews could extend the brand into sandwiches at a time when it was under increasing scrutiny", said a source within the company.
Belated attempts to give the division a separate identity called Yummy Food Company also could not mask the high costs of setting up and running a distribution system, he added.
The company also revealed plans to focus on farming more free-range turkeys and improve bird welfare standards for both the free-range and indoor-reared turkeys on its East Anglian farms. This pledge came as a series of programmes on C4 last week again put the spotlight on production practices in the UK poultry industry.
Bernard Matthews was not featured in the programmes, but has in the past been at the centre of media stories alleging animal cruelty at its facilities.
The company has also had to deal with negative press following the outbreak of avian flu on its farm in Suffolk last year, when it emerged it was routinely shipping turkey meat between the UK and its plant in Hungary. It was also hit in November by the resignation of its chief executive Bart Dalla Mura.
Kerry Foods, which already has UK sandwich operations, said no decision had yet been taken on the future of the Dunstable plant or the 300 staff.