OFT decision saves jobs in Scotland

By Rick Pendrous

- Last updated on GMT

2 Sisters acquired Vion's sites in March this year, subject to OFT approval
2 Sisters acquired Vion's sites in March this year, subject to OFT approval

Related tags Red meat Meat Mergers and acquisitions

The Office of Fair Trading's (OFT's) decision not to refer 2 Sisters Food Group's (2SFG's) acquisition of large parts of Vion UK's food operations to the Competition Commission was widely welcomed news last month, since it safeguarded the jobs of thousands of workers in Scotland and Wales.

The decision means that the 12 former Vion factories – including poultry and red meat operations – purchased by 2SFG can now focus on integrating the businesses and making themselves more profitable in what is a highly competitive market sector.

Vion has processing sites in England, Scotland and Wales, employing about 6,000 people. The sites acquired by 2SFG include poultry sites at Coupar Angus and Cambuslang in Scotland; Llangefni and Sandycroft in Wales; and Basildon, Witham and Eye in England.

Vion UK's red meat plants acquired include: St Merryn Foods at Merthyr in Wales; St Merryn plants at Victoria and Bodmin in England; and McIntosh Donald at Portlethen in Scotland.

Safeguard jobs

In Scotland alone, the decision should help safeguard about 1,680 jobs, including 1,000 at Coupar Angus, 400 at Cambuslang, and 280 at Portlethen.

Inevitably, however, some job losses are likely, as 2SFG seeks to remove any duplication of activities and raise productivity.

2 Sisters said the announcement would enable the group to move forward with plans to invest and improve the Vion business – which remains loss making – and further develop the red meat (beef and lamb) business, which offers growth potential.

A spokesman for 2SFG told FoodManufacture.co.uk: "The outcome also ends any uncertainty for our employees, for our customers and for farmers and our other suppliers who serve these sites."

The news was also welcomed by politicians in Scotland and Wales, where jobs were most at risk should the acquisition not be approved.

2SFG is a diversified UK and European food company supplying poultry, red meat, fish, chilled, bakery and frozen products to the retail, foodservice and food manufacturing sectors.

Bernard Matthews

Meanwhile, press reports have linked 2SFG with a possible bid to acquire the Bernard Matthews poultry business. However, this may prove to be pure speculation given the high level of mergers and acquisitions activity in the UK's meat sector currently.

City analysts Clive Black from Shore Capital told FoodManufacture.co.uk that while the reports were news to him: "2 Sisters has been acquisitive and it is not surprising to see its name associated with any potential activity, albeit it is constrained by its balance sheet to some extent."

Other names that emerged as potential purchasers of Bernard Matthews included Moy Park and the Faccenda Group, which are both major players in the poultry sector.

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