Robert Wiseman Dairies is consulting with 150 staff at its Okehampton dairy and Cupar DC about plans to close the sites.

If Okehampton closes, Wiseman would stop making Devon and Cornish milk and clotted cream, with West Country milk production transferred to its Bridgwater dairy.

The move comes as the company issued a trading update, saying its turnover for the 17 weeks to 22 January had been in line with management expectations and that full-year profits would meet its September guidance, when it issued a profit warning following "fierce competition across the market".

However, Wiseman warned the rising cost of oil and related products such as plastics could impact its results if it could not recover the extra costs from the market. The company said it was paying 10% more for diesel and high-density polyethylene, which is used in milk bottles, than it did in September 2010. It added it was looking to reduce its use of these materials.