Brace’s Bakery in the UK is reportedly planning to close a factory by early next year due to rising cost pressures.
According to WalesOnline, the business plans to shutter its Pen-Y-Fan industrial site in Blackwood, Wales, because of “increasingly difficult” conditions in the bread market.
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Just Food has approached Brace’s Bakery and the Baker’s Food and Allied Workers Union for confirmation of the plans.
Jonathan Brace, the director of Brace’s Bakery, told WalesOnline that the company expects there to be “less than 20 redundancies” as part of the factory closure.
Meanwhile, most of the remaining staff will reportedly move to Brace’s Croespenmaen site, which is located around a mile away.
The Welsh business supplies bread, Welsh cakes, rolls and other artisanal products to major supermarkets.
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By GlobalDataThe news comes as the UK bread market has been hit with rising costs and economic pressures of late. For example, Roberts Bakery recently set out plans to close a factory in central England.
The Cheshire-based bakery was then saved from going under this week by the private investment vehicle of UK-based entrepreneur and billionaire Ranjit Singh Boparan.
Associated British Foods (ABF) also revealed that it is to acquire the Hovis bread business from UK headquartered private-equity firm Endless.
Brace’s told the local publication: “It will be very sad to see long-term loyal staff leave the business, but out of this we will be securing over 200 jobs.”
Meanwhile, a letter sent to staff, seen by the Welsh publication, said that the production of most products produced at the Pen-y-Fan factory will transfer to the Croespenmaen plant by 1 January.
The letter stated: “It is hoped that the majority of permanent staff employed at Pen-y-Fan will transfer to Croespenmaen in accordance with the terms of their employment contract.”
Brace’s told WalesOnline: “The bread market has changed dramatically in the last 18 months, with people moving away from standard sliced breads.
“The whole of the industry is feeling the consequences of a declining market with Morrison’s closing their Rathbones sliced bread bakery, the proposed merger of Allied Bakeries and Hovis, and Robert’s, a large family bakery in Northwich Cheshire, going into administration.
“There has been rising costs with wages, gas and electric, [and] the increase in national insurance have all added to the market pressures.”
Brace’s Bakery’s most recently published financial accounts, filed with Companies House for the year through September 2023, show an increase in turnover from £30.5m ($40.9m) in 2022 to £37.1m in 2023.
