Mondelez International is set to shut a biscuit plant in France by the end of 2025 as the snacks giant aims to “safeguard its competitiveness”.

Production at the Château-Thierry site in Aisne, northern France will be phased out over the next two years.

In a statement, Mondelez described the facility as “very old and would require substantial investment over the next few years to modernise its infrastructure and equipment”.

The Lu brand owner said 61 positions will be eliminated by mid-2026 at the plant.

Mondelez added that the Château-Thierry site has no capacity for new production lines and its current production rate is lagging behind its other sites.

“Despite the measures taken in recent years to optimise production, production at Château-Thierry costs on average twice as much as other Mondelez International sites in the rest of Europe, with no prospect of improvement,” a statement read.

Production will be transferred over to other group sites, mainly La Haye-Fouassière in Loire-Atlantique in western France. As a result, 27 new jobs will be created there.

Mondelez is set to bolster this site, which produces dry biscuits, with a €10m ($10.8m) investment in a new production line and a new packaging line.

Moreover, production of the Figolu biscuit brand – which is carried out by an external partner in the UK – will be relocated to La Haye-Fouassière.

“This project confirms that France is a strategic country for the group, despite the difficulties we are facing,” Roberto Gambaccini, industrial director for Mondelez’s France business, said. “Despite the measures we've taken in recent years to optimise it, production at Château-Thierry still costs on average twice as much as at our other sites in the rest of Europe, with no prospect of improvement.”

The Milka chocolate maker stated it will maintain the same overall volume of production in France with the reorganisation.

“I’m well aware of how difficult this project is for the employees at Château-Thierry,” Gambaccini added.

“Management has proposed to the social partners that they conclude a method agreement, which would define the means and framework of the information-consultation procedure in order to guarantee open, transparent and respectful social dialogue.”

In 2023, Mondelez’s sales in Europe grew 14.5% to $12.86bn on an organic basis. Volume/mix inched up 0.7 percentage points.

Group revenue stood at $36.02bn, up 14.7% on 2022. Volume/mix grew by 1.3 percentage points.