Mendlesham: 45 jobs at risk at distribution centre as part of Hovis bakeries closure plans

Forty-five jobs are set to be axed at Premier Foods’ Mendlesham distribution plant as part of plans to overhaul its struggling bread business.

The owner of Hovis is planning to close two bakeries and cut 900 jobs after its bread division was hit by intense competition in the bread market and a surge in wheat price inflation caused by poor weather.

The biggest impact will be felt in Birmingham, where 511 jobs are to be lost with the closure of a factory and distribution operation.

Hovis operations at Greenford, west London, will also close, costing 196 jobs, while the company’s owner, Premier Foods, is also preparing to shut distribution sites at Plymouth and Mendlesham, resulting in the loss of 95 jobs in total.

Union leaders described it as a “devastating blow” and called for a national meeting with management to discuss the situation.

The closures are subject to consultation with employees but are scheduled to take place during the course of 2013.

St Albans-based Premier, which also makes Mr Kipling cakes and Bisto gravy, is set to lose a �75 million-a-year contract with a major grocery chain from the middle of next year after it was unable to agree a new deal on sufficiently attractive terms.

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It is cutting 130 distribution routes and closing the supply centres to take into account the expected reduction in volumes.

Earlier this month, Premier Foods revealed plans to sell its Branston Pickle operation at Bury St Edmunds to Japanese firm Mizkan, under which all 367 staff at the plant would transfer to it as part of the deal. The parties conditionally agreed a �92.7million sale deal.

In July, Mizkan purchased Premier Foods’ vinegar and sour pickles business for �41m. That transaction included the Sarson’s, Haywards and Dufrais brands.

Premier chief executive Michael Clarke said of the decision over its Hovis arm: “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.”

He added: “Having generated solid growth momentum in our Grocery Division, it is critical that we act to assure the long-term future of the Bread Division. 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.”

The company estimates the changes will cost it around �28million, but expects to recover most of that through disposal of sites and reduced costs. The changes are not expected to hit its 2012 profits, it said.

Urgent talks with Premier Foods’ management have been called for, as the troubled food giant announced a ‘devastating’ 900 job losses at its bread division.

Unite is joining with BFAWU, the majority union on the affected sites, in calling for urgent talks about the job losses. Unite has more than 2,500 members across all divisions of Premier Foods.

Unite national officer for food and drink, Jennie Formby said: “The joint trade unions are calling for an urgent national meeting with Premier Foods’ management to discuss the implications of today’s announcement which is a devastating blow for the 900 workers, their families and the local communities in west London and Birmingham.”

She added: “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.

“At the time, this strategy was described as ‘doomed’ by some analysts and it has resulted in the company being saddled with massive debts.

“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.”