Merrydown is to call time on its cider plant and cease production of Shloer fruit drink. The company will close its site at Horam, East Sussex, at the end of this year with the loss of around 35 jobs, and will hand over production to sub-contractors.

Speaking to the Daily Telegraph, chief executive Nigel Freer said: ""This is a purely strategic decision. When we took the business over six years ago it was technically bust and we have turned it around.

"To bring the plant up to world standard would cost a lot of money," he told the paper. "We knew an extensive refit would be needed someday, and that day is looming in the next two years. That is capital expenditure we would rather not make."

Manufacturing will be given to companies including Thomas Hardy in Tiverton and Hall & Woodhouse in Dorset, the paper said. Merrydown will continue to use the same contractors for Shloer, and is in talks with three firms for the cider contract.

"We have proven to ourselves that it can work and it is a tried and tested formula," Freer told the Telegraph. Restructuring costs and fixed asset write-offs will amount to £2.5 m this year but the gain on disposing of the site "should be substantially in excess of this cost", the company said.