Warburtons lukewarm over rival's overtures about its Newport bakery

04-Oct-2010 - Last updated on 06-Oct-2010 at 12:44 GMT

Warburtons has acknowledged receipt of a letter from Welsh rival Brace’s Bakery expressing an interest in its Newport bakery, but does not appear keen to engage in talks, according to Brace’s.

Scott Richardson, sales and marketing director at Brace’s, which is based in Newport, told FoodManufacture.co.uk that bosses had contacted Warburtons as soon as they heard that the firm was planning to close its Newport site with the potential loss of 114 jobs.

He added: “We called Warburtons and didn’t have any success so we wrote to them as well, expressing our interest. They acknowledged receipt of our letter but that was all. I’ve since contacted the Welsh Assembly government and the Bakers Food & Allied Workers Union to register our interest."

Genuine offer

He added: “I am hoping that the union might be able to facilitate a conversation between us and Warburtons, but I understand that they may not want to sell to a competitor.”

Brace’s, which has a highly automated plant bakery at Pen-y-fan producing bread and a second, slightly older facility at Croespenmaen producing bread, morning goods and Welsh cakes, has been growing steadily, said Richardson.

“We have been starting to think about our long-term plans and we will have to look at a new site soon, which is why we want to talk to Warburtons. I want to make it clear that this is not a PR opportunity but a genuine offer.”

Brace’s supplies all of the major multiples in the region including Tesco, Asda, Sainsbury’s and Morrisons, plus the independent retail sector, and was steadily expanding into the south of England, he claimed.

Established in 1902 by George Brace, Brace's is now run by the fourth generation of the family and employs more than 300 staff.

Weak demand

Warburtons, which opened a £45m state-of-the-art bakery in Bristol in December 2008, said that it had originally forecast that there would be sufficient demand from the south west to maintain its site at Newport when its new Bristol bakery was up and running. However, the bread market in the region had not grown in line with its expectations.

A spokesman said: “Category demand has not grown in line with expectations and therefore we have had to conduct a review of capacity across the business. This review has included an investigation into which bakeries have surplus capacity . Unfortunately this has led to the proposal to close Newport bakery.'”

Warburtons, which acquired the Newport site in 2005 and started baking bread there in 2006, declined to comment on the approach from Brace's.