Bury St Edmunds/ Mendlesham: Premier Foods warns of job losses

HOVIS bread and Mr Kipling cakes group Premier Foods today warned that it plans to cut around 600 jobs – 5% of its workforce – in a bid to double its programme of savings to �40million by next year.

HOVIS bread and Mr Kipling cakes group Premier Foods today warned that it plans to cut around 600 jobs – 5% of its workforce – in a bid to double its programme of savings to �40million by next year.

The debt-laden group, whose sites around the UK include a factory in Bury St Edmunds and a distribution site at Mendlesham, near Stowmarket, plans to reinvest the savings in growth the eight “power brands” on which it plans to focus.

Besides Hovis and Mr Kipling, Premier’s power brands include Ambrosia, Batchelors, Bisto, Loyd Grossman, Oxo and Sharwood’s.

Premier, which was recently granted extra time by its banks to get its finances in order, plans to double the marketing spend behind the key brands this year, starting with television adverts for Sharwood’s and Loyd Grossman next month.


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The planned job cuts, which are subject to a consultation process, are expected to focus on overhead functions and reflect the group’s reduced size following recent disposals such as Quorn and its canning operation.

Premier said that “further selected businesses” were likely to be sold during 2012, to increase its focus on its power brands and and to helping reduce its borrowings.

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The St Albans-based company, which employs around 12,000 people in the UK and Ireland, has been fighting for survival in recent months as profits plummet and it struggles to keep up with repayments on its �850million debt mountain.

Its share price has collapsed from 34p to 5.75p over the past year after a series of profit warnings as shoppers increasingly switch to supermarket own-label brands and it is forced to put on more promotions to compete.

New chief executive Michael Clarke, who joined the business from Kraft, said: “While decisions to reduce the workforce are always difficult, I’m convinced we are taking the right steps in the long- term interests of the business, employees and our stakeholders.”

The group’s Hovis bread business includes a distribution site on the Mendlesham Industrial Estate while the product range at the Bury St Edmunds factory, in Mildenhall Road, includes Loyd Grossman cooking sauces.

However, the Bury site also produces Branston pickle, Haywards pickled onions and a number of own-label products for supermarkets including Tesco, Asda, Morrisons and Sainsbury’s.

Premier added today that trading over Christmas had been in line with its expectations but its results for 2011 would be towards the lower end of City hopes.

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