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November 20, 2012

UK: Premier to cut 900 jobs from bread arm

Hovis maker Premier Foods is to close two bakeries, cut over 100 distribution routes and revamp its logistics operations as it reshapes its bread business.

By Dean Best

Some 900 jobs are to go at Premier Foods plc after the Hovis manufacturer announced a range of measures to reshape its bread business.

Premier plans to close two bakeries, cut over 100 distribution routes and revamp its logistics operations in a bid to cut costs from its bread arm.

The company wants to close its bakeries in Greenford and Birmingham. Distribution sites in the two locations are also up for closure amid plans to remove 130 routes from its network. Two other distribution sites in Mendelsham and Plymouth are also set to close. Premier is changing its network after the end of its contract to supply own-label bread to The Co-operative Group. Premier said it would “restructure” its outsourced logistics operations to “optimise” the new-look network.

Premier, operating in a UK bread sector dogged by promotions and excess capacity, is trying to shake up its bread business to cut costs and improve returns.

The company has even been reported to have hired Goldman Sachs to see what takeover interest there could be in its bread business, although it has refused to comment publicly on these claims. 

Click here to read analysts’ views on the closure of Premier’s two sites.

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