Asda supplier axes 500 staff

Ferndale Foods has made more than 500 staff at its Erith factory redundant.

The company proved unable to secure additional business to replace a £40m ready meals contract with Asda that it lost last year, said finance director Graham Melia. “There are about 200 staff left out of the original 700 making a variety of products including cooked sausages for the retail and foodservice market.”

He added: “We’re obviously hoping to ramp things up again, but in the short term, it was not possible to keep the staff on without securing another major contract, and we didn’t have a reasonable amount of time in which to do this.”

Although Asda insisted that it had provided Ferndale with sufficient notice of its plans to switch to another supplier, Ferndale’s plight has been seized upon by opponents of the large supermarkets as further evidence that they have become too powerful.

The job losses were announced as the Office of Fair Trading said it would make its decision over whether to refer the grocery sector to the Competition Commission for the second time in six years by early March.