Northern Foods has issued a profit warning because it says higher energy costs have eaten into its margins.

Nonetheless, the manufacturer of Fox’s biscuits, Pork Farms pies and San Marco pizzas said sales had grown according to expectations, at 3% in the third quarter.

But the firm’s investment programme coupled with oil and energy prices have eaten into earnings, and the outlook for pre-tax profit is now lower than last year’s £62m.

Negotiations with customers on retail price rises were taking longer than expected, the firm added.

“Over 50% of the price rises we targeted have been achieved already, but issues relating to Christmas price offers meant we couldn’t put as many through as we would have liked,” said a spokeswoman.

But she insisted that the firm’s financial concerns would not have an impact on the price it pays British farmers for their meat, vegetables and fruit.

“We have a long-term strategic procurement process.”

Northern Foods asks its suppliers to stick to a code of practice, which specifies animal welfare standards and restricts the use of agricultural chemicals and veterinary products.

“A good proportion is UK sourced although we will seek to use international sourcing where country of origin is important.”

The company has just launched an appeal against a High Court ruling that Melton Mowbray pork pie producers could apply for European protection for their product.

Northern Foods currently uses the Melton Mowbray name, but does not produce the pies in the region