Blog: Cookie crumbles for Burton's
Dean Best | 14 May 2007
Fierce competition in the UK biscuit sector has forced the country’s second-largest supplier, Burton’s Foods, to axe hundreds of jobs.
The company, which produces a number of the UK’s most iconic biscuits, including Wagon Wheels and Jammie Dodgers, has decided to stop producing biscuits at its site on The Wirral – a move that could lead to the loss of 660 jobs.
The company blamed “a highly competitive environment” and “overcapacity” in the UK biscuit market for the decision to scale back production at the site. The move comes under two months since private equity group Duke Street Capital bought Burton’s.
A glut of biscuit manufacturers operate in the UK and producers are falling victim to greater health awareness in the country. Sales are dwindling as consumers grow ever more health-conscious and parents become wary about what they should feed their children.
Those trends also provide a gloomy backdrop to the operations of UK-based cake maker Inter Link Foods. Inter Link has installed a new chief executive, weeks after issuing its second profit warning in a matter of months. And last week, the company insisted it can turn the business around after becoming the subject of takeover interest from one of its major shareholders.
Inter Link, which produces a range of private-label cakes and savoury products for UK supermarkets, has admitted it needs to work on its own-label operations to revive the business.
However, with consumer trends as they are in the UK and with the never-ending pressure on margins from operating so heavily in the private-label business, Inter Link’s new chief executive Ian Croxford seems to have his work cut out.
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