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November 9, 2022

Bakkavor blames economic climate for plant closures

More than 900 employees across two UK sites will be impacted if the closures go ahead.

By Andy Coyne

UK private-label manufacturer Bakkavor is proposing to shutter two of its factories.

It said the plan to close Bakkavor Salads in Sutton Bridge, Lincolnshire and Bakkavor Desserts in Leicester, both in the English east Midlands, resulted from a “challenging macro-economic backdrop” and was a “difficult but necessary business decision”.

More than 900 employees across the two sites will be impacted if the closures go ahead.

Bakkavor said: “We will shortly be commencing a 45-day consultation period with affected colleagues and their representatives at both sites. If the proposals go ahead, we will do everything we can to support our colleagues and try to minimise job losses.”

The company said the plan to close its two sites follows “a detailed review of our UK footprint”. It suggested that if the closures go ahead, “our other UK sites have the capacity and capabilities to continue to fully service our customers”.

Bakkavor’s newly-appointed CEO, Mike Edwards, said: “As with businesses all over the UK, we are having to take decisive action to adapt to the challenging macro-economic backdrop. The decision to close any site is never taken lightly, and we do not underestimate the impact of this announcement on our colleagues and the local communities within which we operate.

“We remain committed to both protecting our business and doing everything we can to support our people through this difficult time.”

Commenting on the plan, Ravinder Assi, regional officer for the trade union Unite, which represents workers at Bakkavor’s plants, said: “Unite will be providing support to our members at the impacted Bakkavor sites in light of these plans. We will be liaising with the company to ensure that redundancies are kept to a minimum and alternative employment offered at other sites where possible.”

Bakkavor, which supplies UK retailers including Tesco, Sainsbury’s and Marks & Spencer, has just averted a walk-out by 700 employees at its plant in Spalding in eastern England. Workers were due to down tools in early November in a dispute over pay before a new offer from the company was accepted.

Announcing its half-year results in September, the company, which has around 15,800 employees working across 29 UK sites, said the significant level of inflation and consumer headwinds it is continuing to face are expected to persist into next year.

In the half-year to 25 June, Bakkavor, which manufactures products ranging from ready meals to desserts, pizza and bread, saw its revenues increase by 10.3% year on year basis, to GBP1.01bn (US$1.15bn). However, its operating profit was down by 12.5% to GBP41.1m.

Edwards, formerly COO of the company’s UK business, became CEO on 1 November after Agust Gudmundsson stepped down from the role. Gudmundsson, a co-founder of Bakkavor, has retired.

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