Premier Foods to cut 900 jobs in bread division

  • 20 November 2012
  • From the section Business
Media captionWorkers have spoken of their devastation, while the firm says the loss of a £75m contract was key to the decision

Premier Foods, the maker of Hovis, is cutting 900 jobs at its bread division and is closing two bakeries.

The company said it would close two bakery sites in Greenford, west London and Birmingham some time next year.

Premier, which is the country's largest branded food producer, is also simplifying its bread distribution network by cutting some 130 routes.

Unions said the job losses were "devastating" and called for urgent talks with Premier's management.

The closures come on top of the previously announced closure of its bakery in Eastleigh, Hampshire.

Greenford and Birmingham will also see their distribution centres close, along with Plymouth and Mendlesham in Suffolk.

The job losses also stem from Premier's move to restructure its logistics operations.

Premier's other major brands include Bisto, Mr Kipling and Sharwood's.

'Increase focus'

Premier has been selling off top name brands which it says it does not consider "core" ones, in order to cut its debts of more than £1bn.

In March its creditors gave it extra time to repay its debts.

Well-known brands that have been sold include the Branston range of pickles and sauces, Robertson's jam and Sarson's vinegar.

The changes to the bakery division also take account of the loss of a "low margin" contract with a supermarket to produce bread, worth £75m, which was announced last month.

The company's chief executive, Michael Clarke, said the cuts were critical for securing the bread division's future: "By simplifying our cost base, we can increase focus on improving efficiency, quality and service levels to help grow our core Hovis business.

"We recognise the impact these actions will have for our employees at the sites affected. Decisions will not be taken lightly but they are necessary if we are to build a strong and successful future for the bread division and those who remain with our business."

'Disaster story'

The country's largest trade union, Unite, has joined with BFAWU, the majority union on the affected sites, to call for an urgent meeting with the company's management.

"This is just another stage in the disaster story that has been Premier Foods over recent years, which has consistently struggled ever since its decision to buy Hovis in 2006," said Jennie Formby, Unite national officer for food and drink.

"Management claims the job losses are as a result of 'competition and wheat prices', but the reality is that our members are continuing to pay the heavy price of Premier's failure to make a success of the business and we remain extremely concerned about the future of the remaining business."

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