Tough market threatens 150 Kerry Foods jobs at Poole

By Rod Addy

- Last updated on GMT

Kerry Foods makes a range of convenience food brands, but its savouries and pies that are currently feeling the pinch
Kerry Foods makes a range of convenience food brands, but its savouries and pies that are currently feeling the pinch

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Rising raw material costs have endangered 150 jobs at Kerry Foods’ savouries and pies factory at Poole, Dorset, in what trades union Unite calls “a major blow” for the area.

The convenience food giant told workers in March in an internal memo up to 150 jobs were under threat at the site as a result of the need for continued cost-cutting there.

“Unite has been actively engaged with the company to mitigate the effect of these job losses,”​ said a spokesman for the trades union. “This is a major blow to the local economy and employees would have difficulty in gaining alternative jobs in this area without the appropriate retraining.

“The lines affected are hot pies and folded items, such as sausage rolls, while the cold pies are holding up. Unite represents about 40% of the workforce and will be meeting management again on Thursday (17 April) for further talks. We will continue to fully support our members in the weeks ahead.”

A Kerry Foods spokesman told no single event had sparked the move, but rather it was the result of years of considering various options to improve efficiency and slash costs.

“This has been ongoing for the past couple of years. We have done a lot of work in terms of recovering costs and improving efficiencies, but 150 roles are currently challenged.

“We have engaged with the workforce on site and a lot of improvement has been accomplished, but we are still in a situation where there is a need to improve efficiencies.”

​Raw material increases

The savouries and pies sector faced heavy market and cost pressures, he said. “Volumes haven’t grown in some categories and there have been cost escalations, particularly raw material increases.”

Kerry Foods had worked hard to devise alternative options to staff cuts, and was cooperating with Job Centre Plus and local council representatives to support staff, he said. But he added: “This is a factory-specific and category-specific issue due to the competitiveness of the market environment.”

The company had concluded the move was necessary to preserve the viability of the plant, he added.

Management, workers and union representatives are in the midst of a 45-day consultation period to explore options for staff affected at the Sterte Avenue West factory, which employs 860 people.

‘Solid performance’

In its full-year results, issued in February, Kerry Foods reported “a solid performance​in the UK, despite competitive market pressures​.

However, it said sales of frozen and chilled ready meals had taken a hit from loss of consumer confidence following the horsemeat food fraud scandal.

In July 2012, the company closed its meat processing and savouries factory in Durham​, blaming adverse market conditions in cooked meats, falling factory throughput and lost sales.

Do you have any comments about this article or any other situation in which food and drink manufacturers are cutting costs by reducing headcount? Feel free to click on our comment box below.

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