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Monterey Gourmet Foods is set to cut costs to boost profits at new acquisition Sonoma Foods, the US pasta-to-cheese group has said.

Montgerey plans to replace the current management team at Sonoma and refocus the food group on its core cheese business.

As part of the shake up, Monterey will also write down intangible assets, inventory and accrue severances, totalling around $2.4m. A cost-savings programme, expected to save around $700,000 annually, will also be implemented.

Scott Wheeler, Monterey Gourmet Foods’ CFO, said: “Our plan contains concrete actions that eliminate managerial distractions and reduce our expense run-rate by approximately $700,000.”

Monterey believes it will be able to stem the tide of losses racked up at Sonoma. Eric Eddings, president and CEO of Monterey, said critical production and procurement decisions created operating losses with the cheese brand.

“Therefore, similar to our successful turnaround of our Casual Gourmet brand, we intend to focus Sonoma Foods on our core cheese business and return the unit to positive cash flow before we extend the product line,” he said.

Monterey said it would consolidate the majority of operations, including moving production of core products to California from Wisconsin.

“We believe in the underlying value of Sonoma Foods and our abilities to improve the unit’s performance,” Eddings added.