After an “intensive review of its long-term strategy”, the company has announced 340 job cuts at Vion Food Netherlands and 290 job cuts at Vion Food Germany. The management is now focusing on the future of the UK arm of its business.
Rob Smith, head of marketing and communications at Vion Food UK, told FoodManufacture.co.uk: “Because of the scope and complexity of our business in the UK it will take more time to analyse our strategic options and we can’t comment on the future of any specific part of the business.”
Vion has two core activities: food and ingredients. The group has a turnover of euro 9.5bn and the company employs 26,500 staff across Europe.
The UK arm produces and processes beef, lamb, pork, bacon and chicken as well as a wide range of convenience products such as sausages, cooked meats and added-value cooked chicken.
The UK operation has facilities across the UK, from farms and hatcheries to primary production, processing and packing.
The business is primarily focused on the UK retail market but also includes important foodservice and wholesale clients within its portfolio.
The new strategy is designed to help the business work “more effectively and efficiently”. A company statement issued on June 15 said: “Products in the overall range that do not sufficiently match the strategy will be discontinued. These measures will not be without job cuts, both as a result of plants being closed and changes to back office activities.”
Julian Wild, food group director at legal firm Rollits, was not surprised by the news. He told FoodManufacture.co.uk: “They’re not trading terribly well, particularly on the pork side of their business, which they have found very tough. They’ve had quite a lot of issues with the business with Grampian Country Food Group.”
Vion acquired Grampian Country Food Group in 2008. Based in Livingston, Scotland, the firm supplies chicken, beef, pork and lamb and was integrated into the Vion Food Group. But Vion’s troubles had a bigger source than Grampian, according to Wild.
“I think it’s [the restructuring] indicative of the fact that they’re operating in a competitive tight-margin market place. They’re up against some very strong competitors in the UK such as Cranswick,Tulip and other home players, which makes life very difficult for them.”
Vion said the strategy for its three home markets – Germany, the Netherlands and the UK – was aimed at “further enhancing the company’s productivity and product quality, while lowering costs”.
The future strategy for Vion Food Netherlands will be to concentrate on its pork activities. The restructure will also address the overcapacity of logistics service provider Distrifresh Boxtel and bring indirect support departments in line with the new production organisation. Vion will look to relocate some of the 340 permanent staff whose jobs are under threat.
Vion Food Germany will be restructured to “concentrate on attractive markets and cost reductions”. By the end of 2012, 290 employees will lose their jobs, about 125 of whom work in support departments.