2 Sisters will profit from horsegate

By Rick Pendrous

- Last updated on GMT

Related tags: Meat

Meat processors have welcomed retailers' vows to source meat locally. Don't miss our free horsemeat webinar. See details below
Meat processors have welcomed retailers' vows to source meat locally. Don't miss our free horsemeat webinar. See details below
Ranjit Boparan's acquisition of the outstanding business of Vion UK last month was heralded as a shrewd move for his company 2 Sisters Food Group (2SFG) as several retailers announced their desire to shorten and simplify their meat supply chains in the wake of the 'horsegate' scandal.

Tesco even went as far as taking out double-page spreads in the national newspapers to apologise to customers and announce its plans to source meat locally. It is a sure sign of how worried the supermarkets are about the damage this scandal has done to consumer confidence and the potential impact it could have on their businesses.

While the genesis of the acquisition by Boparan Holdings, parent of 2SFG, would have predated the horsemeat contamination incidents that began in January, it emphasised Boparan's belief that he could make a successful business out of Vion UK's red meat activities where Vion could not.

The acquisition is also significant in that it marks the entry of 2SFG into the beef and lamb sectors for the first time.

Welcomed the acquisition

While the 6,000 workers at the 11 sites processing lamb, beef and poultry (seven concentrated on poultry and four on beef and lamb) no doubt welcomed the acquisition, one union official from Unite said that staff at the Camberslang and Coupar Angus sties in Scotland were on tenterhooks and he had "no doubt that there would be challenges moving forward".

Boparan will inevitably want to transform the former Vion sites into his trademark lean, 'customer-centric' operations and this will probably lead to a rationalisation of activities and the loss of jobs.

Although no financial details were disclosed, reports suggested that Boparan obtained the businesses for a snip at around £30M a similar figure to what he apparently paid for Premier's Brookes Avana operations.

As well as introducing 2SFG to the beef and lamb categories in the UK, it further increases its share of the poultry market, where Boparan has his roots.

The Vion acquisition follows Boparan pipping Greencore to the post to acquire Northern Foods in early 2011, and his subsequent purchase of Brookes Avana from Premier Foods in December 2011.

'Significant force for consolidation'

Analysts Clive Black and Darren Shirley at Shore Capital described Boparan as a "significant force for consolidation"​ in UK food manufacturing.

They suggested that the major multiples' decision to source more meat from the UK would be well received by other leading meat processors, such as Cranswick, Hilton Food Group and Moy Park.

Meanwhile, Morrisons was making the most of the situation by publicising its vertically integrated fresh meat supply chain from farm to abattoir to supermarket which meant that it could guarantee the provenance of its meat. It is not clear, however, if it can make the same claims for all the protein contained in the processed foods it sells. It had to remove some Findus-branded lasagnes from shelves after tests found some contained 100% horse.

Food Manufacture​ is staging a free one-hour webinar to learn the lessons of the horsemeat crisis at 11am GMT on Thursday May 16 in association with business law firm DWF.

Taking part will be Andrew Rhodes, director of operations at the Food Standards Agency, Professor Tony Hines, head of security and crisis management at Leatherhead Food Research, and Hilary Ross, partner DWF.

Book your free place at the webinar here​.

Related topics: Meat, poultry & seafood

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