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March 8, 2021

Arla Foods considering closure of UK creamery

Dairy cooperative Arla Foods is weighing up whether to close a cheese factory in the UK, partially related to the affects of the pandemic.

By Simon Harvey

European dairy cooperative Arla Foods is weighing up the future of a creamery in the English county of Cornwall following the loss of private-label cheese contracts and due to “continued instability” in the foodservice sector, which is largely inactive because of the Covid pandemic.

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Denmark-headquartered Arla said the closure of the factory in Trevarrian, near the coastal town of Newquay in England’s south-west, is a proposal at this stage. But if the plan goes ahead, the site will shut early in the coming summer, putting 37 jobs at risk, which could be relocated elsewhere in the company’s network subject to consultations.

Arla said production volumes at the plant had been in decline for three years even before Covid-19 wreaked havoc on the out-of-home channel and the situation “has now been significantly worsened by the loss of a number of key own-label cheese contracts”. The facility produces brie, camembert and other cheeses under retailers’ own brands.

Alison Rance, the vice-president of production for Arla in the UK, said in a statement: “Unfortunately, the drop in production volumes for the site means we believe it is no longer financially responsible for us to keep our Trevarrian facility in operation. We have explored multiple options, including additional volume opportunities for the site, but see no other alternative than to propose a closure of the site.   “We recognise that this will be a difficult time for all those colleagues impacted by these proposals and our priority right now is to support them to manage this situation as best we can. We are entering into full consultation with all colleagues affected by this proposal, and their trade union representatives.”

Trade union Usdaw has issued a statement on behalf of the workers from area organiser David Clift. He said: "This is clearly devastating news for the employees at the site and is a significant blow for the local economy. While recognising that the loss of key own-label cheese contracts and the instability in the foodservice market lie behind this proposal, Usdaw will be doing all it can during the collective consultation process to look at alternatives, protect jobs and secure the best deal possible for members." 

Arla said milk from local farmers would be redirected to other plants in Taw Valley in adjacent county Devon and Westbury, a town in the south-west county of Wiltshire.

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Free Whitepaper
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What is the impact of historically high inflation on the UK consumer landscape?

The average UK consumer is experiencing a severe cost-of living crisis as inflation surges to a forty-year high and the price of goods continues to rise. This shock is the result of the sharply increasing costs of commodities, energy, and the ongoing conflict in Ukraine, and is threatening FMCG manufacturers, retailers, and foodservice operators’ ability to survive and grow. Inflation will have a profound effect on many consumer-facing industries in 2022 and beyond. Consult GlobalData’s new whitepaper, Inflation in the UK: The Impact of Historically High Inflation on the UK Consumer Landscape, to better understand shifts in consumer behavior and their impact on spending patterns, as well as the implications for UK businesses. This whitepaper covers:  
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  • What is the current inflation situation in the UK?
  • What impact is inflation having on UK retail sales?
  • What tactics are businesses relying on to tackle the effects of high inflation?
  • How are consumers changing their behaviors to cope with the higher cost of living?
  • Which industry sectors are most vulnerable to reduced consumer demand?
  • How is the government responding to high inflation?
  • How long will high inflation last in the UK?
  • How can your company survive and thrive in a high inflation environment?
Enter your details here to receive your free whitepaper and ready your business for these increasingly uncertain times.
by GD50 Custom
Enter your details here to receive your free Whitepaper.

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