Heinz plans production freeze to offset cost rises

By Rod Addy

- Last updated on GMT

Heinz plans to halt production at its Kitt Green site for four days this Easter
Heinz plans to halt production at its Kitt Green site for four days this Easter

Related tags: Kitt green, Cost

Rocketing utility and stock holding costs have forced Heinz to take the radical step of temporarily halting production at its Kitt Green site in Wigan for four days this Easter.

Heinz said it had previously reduced the number of lines running in the factory, which makes more than 1bn canned products annually, at the end of the soups season in May. But it has now decided to freeze operations for four days because running reduced lines still demanded money for steam, hot water and lighting. “Holding excess product in stock outside of the soup season also is extremely expensive and inefficient,”​ a company spokesman added.

Headwind

When asked whether Heinz expected further increases in utility, commodity and packaging prices, he said: “Well, I can’t see them going down. We live in a world where commodities continue to exist in a headwind​.”

He said the business aimed to offset spiralling costs by driving further processing efficiencies. However, he did not rule out a similar break in production in 2013. “Changing the production flow is part of the plan.”

Meanwhile, Unite the union joined with Heinz in spurning reports of dissent at Kitt Green over workers being asked to include the Easter production break in their holiday allowance.

Local press quoted an angry worker and referred to debate over the decision to temporarily halt production by members of Unite the Union at a mass meeting at Goose Green Social Club this weekend.

Completely erroneous

But the Heinz spokesman said there had been “no dissent” ​over the announcement, which was made before Christmas. And he said the suggestion of a mass meeting especially to debate the decision was “completely erroneous​”, adding: “It’s happening anyway.”

Similarly, Eddie Hulse, lead regional officer for Unite in Prestwich, said: “There is no stoppage taking place. There is a normal periodical meeting taking place outside of works time to discuss a pay claim. Must be a quiet time in Wigan if the local press have to make up stories.”

The Kitt Green factory was the focus for union unrest a year ago in a dispute over payment terms. Workers staged four 24-hour stoppages before an agreement was reached.

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