County Council bails out frozen food firm

Ailing firm Northumberland Foods has been rescued by a £1.5M package, including an unprecedented loan from local government, saving up to 200 jobs.

The loan from Northumberland County Council (NCC) follows the story​ in Food Manufacture​’s June issue that a campaign led by Liberal Democrat MEP Fiona Hall, had unlocked additional state aid for beleaguered food and drink processors.

Northumberland Foods became entitled to government-backed financial support after European rules were relaxed to help companies struggling in the economic recession. The change in rules, which were originally designed to ensure firms operated on a level playing field across Europe, makes more companies eligible for central or local government aid.
The £250,000 NCC loan will help save up to 200 jobs and will assist the firm during its slower summer months. Further loans of £960,000 from The Royal Bank of Scotland and £250,000 from regional development agency One North East will allow the firm to transform itself into a profitable business.

Northumberland Foods acquired the assets of the former Cheviot Foods at Amble from administrators and began operations at the end of January this year. But a review revealed that the factory urgently needed extra working capital to see it through to the winter.

NCC deputy leader Roger Styring said action had been taken to avert the potentially severe and long-lasting impact of the factory’s closure on a community where unemployment was already above the county average. He said: “The action we and our partners have taken, while coming with an obvious element of significant risk, is designed to give this important local business every chance of succeeding and take away the uncertainty that has been hanging over many families in the area.”

Northumberland Foods md Peter Kirkham added: “This deal will safeguard the short to medium-term future of Northumberland Foods while it re-establishes itself as a prime supplier of frozen vegetable products to the major retail and food service markets. We are very grateful to Northumberland County Council, to The Royal Bank of Scotland and to One North East for their support when it is most needed.”