Burtons Foods boss Ben Clarke says he remains "bullish" about the prospects for the UK biscuit market despite announcing proposals to close one of his firm's four UK biscuit factories with the loss of 342 jobs and make a further 70 staff redundant at another.
Speaking to FoodManufacture.co.uk after announcing proposals to close the Burtons factory in Moreton, Merseyside, chief executive Ben Clarke said: "We've seen sales growth of 3-5% over the past 12 months and within that very strong growth from Jammie Dodgers, Maryland cookies and Cadbury products [which Burtons makes under licence].
"We're also investing significantly to upgrade our capability, spending £25m in three years, which will include £5m on chocolate enrobing and robotics at our Edinburgh site and £2m on chocolate moulding at our Llantarnum site in south Wales, so I do genuinely believe that the manufacture of food products in the UK has a future.
"However, we need to operate more efficiently as this is a very competitive market and cost prices in all of our key raw materials - cocoa, sugar, wheat flour and vegetable oils - have risen significantly."
Soaring commodity prices
He would be "very surprised" if there are not further price increases in the snacking sector in the coming months to reflect these pressures, added Clarke.
"Moreton [which makes chocolate biscuits and has a chocolate refinery] is the smallest site with the highest cost base, which is why we have chosen it [for closure]. We are also looking into the feasibility of outsourcing chocolate refining to a third party specialist."
The firm, which has just entered into a 90-day consultation period with staff at Moreton, expects biscuit production to start transferring to Edinburgh and Llantarnum in the spring.
Plans to introduce new shift patterns and working practices would result in 70 redundancies at Llantarnum, which employs 725 staff, he said.
"Demand in the biscuits market is incredibly volatile because of seasonality but also the high levels of promotional activity, so we need to be much more flexible in the way that we manage production and structure our workforce."
Separately, Burtons is also looking to consolidate its Knowsley multi-site distribution operation (operated by DHL) into a single new location, which would prove far more efficient, he said.
"We've already identified the new site and DHL is the preferred bidder."
Unite cries betrayal
But the news has been greeted with horror by trade union bosses, who claim Burtons struck a deal wih Unite three years ago to guarantee work until 2012 and to develop Moreton into a 'flagship' site.
National officer for food and drink Jennie Formby said: “We will fight with all our power to save this plant because closure is not an option. It will devastate this community. It also gives the lie to the claims by Mr Cameron and Clegg that the private sector will create jobs for the million or so they are cutting in public sector."
Regional officer Ritchie James added: “Our task now is to consult with our members on next steps, and to give them every reassurance of their union's support at every level. This plant was saved from the axe in 2007 through the efforts of the workers, their friends in the community and their union."
Wirral Council member Jeff Green said he was “incredibly disappointed” by the proposal and was seeking an urgent meeting with company bosses in order to explore alternatives that would save jobs in the region.
He added: “The Council has invested large amounts of time and money over recent years to support and modernise this factory and we stand ready to do so again.”
Burtons, which makes Maryland Cookies, Jammie Dodgers, Wagon Wheels and own-label biscuits, plus Cadbury-branded products under licence, is owned by Apollo Global Management, Canadian Imperial Bank of Commerce and private equity firm Duke Street Capital.
The firm, which has its HQ in St Alban's, has four UK factories in Blackpool, Moreton, Edinburgh and Llantarnum.