Croatian food producer Atlantic Grupa has entered talks to buy Serbian condiment and spreads maker Foodland.

In a bourse filing, Atlantic Grupa, which makes savoury spreads and snacks, said it "has started the negotiations process for takeover of the proprietary interest in the company Foodland".

It stressed, however, the negotiations had "not been finalised".

According to local press, struggling Foodland has for some time been looking to recapitalise.

At the end of October, Atlantic Grupa cut its 2014 sales forecast as it battled a "challenging business environment". The company expects its 2014 sales to reach HRK5.22bn (US$856.9m), up 4.3% on 2013 but down on its forecast in July of annual sales HRK5.44bn.