Avara Foods, a UK-based poultry processor, is proposing to close its duck unit Cherry Valley Foods as Brexit and now Covid-19 have put added pressure on the already struggling business.
Around 300 workers at Cherry Valley Foods, located in the town of Caistor in the east England county of Lincolnshire, will be affected by the closure, which was announced to staff and suppliers on 29 April. A consultation period is currently underway to assess the future of the business.
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“Despite significant investment in the duck business, external market conditions have become increasingly challenging, with feed costs, feather pricing and European competition all combining to put the business under immense pressure,” Avara said in a statement.
“While not causes in themselves, recent developments with Brexit and Covid-19 have exacerbated the situation, particularly the significant drop in sales volumes as a result of catering and foodservice closures. While these challenges may be temporary, the underlying market conditions seriously undermine the viability of the business.”
Avara said it purchased Cherry Valley Foods in 2015 when the former was trading as Faccenda Foods. In 2018, the name Avara emerged through a joint venture between poultry firm Faccenda and the chicken division in the UK of US-based agri-food giant Cargill. Avara supplies chicken, turkey and duck to the retail and foodservice channels.
Andy Dawkins, Avara’s chief executive, said: “This has been an incredibly difficult decision and one that reflects a market that has gradually deteriorated over several years. Despite investment in the business and the best efforts of all involved, the market has reached the point where the business is no longer sustainable, with no clear route to recovery.
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By GlobalData“We are now committed to a meaningful consultation process and, if our proposal goes ahead, providing the necessary support to everyone affected and a smooth transition with all our trading partners.”
