This move is in response to a “challenging business environment and the need to respond to new technology classification systems such as visual imaging analysis (VIA)”.
It is hoped the deal will help secure the long-term future of independent classification services for farmers across Great Britain.
MLCSL is an independent provider of abattoir authentication and classification services to the British processing industry, linked to the deadweight sale of cattle, sheep and pigs. It was formed in April 2006 to provide an appropriate commercial structure with a better-defined identity ahead of the implementation of the Levy Board review, which led to the establishment of the AHDB.
In a statement, AHDB said it believed that by moving the business into the private sector with a company that has a strong track record of delivering independent services to the meat industry, “it will open up opportunities for greater efficiencies and synergies that would not be possible under the current public ownership model”.
The process for the takeover began a year ago, when AHDB looked to identify suitable companies that met “robust” criteria set down by its board, including value for money, track record of delivering independent verification services to the meat industry and commitment to the long-term future of the business.
Following talks with a large number of interested parties, AHDB has now moved to the final phase of negotiations with HallMark and it is hoped that a deal will be completed by the summer.
No job losses
Speaking to Food Manufacture, managing director Christine Walsh said that although it was still early days in the process, “a crucial part of the decision process was that the service would both continue and remain independent”.
She added: “There are no anticipated job losses, in fact we are currently recruiting for a number of positions.”
AHDB chief executive Jane King said: “MLCSL is facing an increasingly challenging business environment and we believe this move will help secure its future.
“We believe there will be synergies and efficiencies realised under commercial ownership that would just not be possible under the current public ownership model.
“These will be vital in securing the short-term prospects of the business and freeing up investment for the future.
“In selecting the final bidder, the AHDB board put a strong emphasis on HallMark’s track record of delivering independent services for government and the meat industry as it is essential that farmers continue to have confidence in the classification services supplied by MLCSL in the future.”
HallMark chairman David Peace said: “We are extremely pleased to have been selected by AHDB as the organisation with which they will hold exclusive discussions about taking over its subsidiary, MLCSL.
“As a key contractor to government departments for statutory farm inspections and Official Controls in abattoirs, we pride ourselves on HallMark’s independence, integrity and expertise. It is therefore clear to us that MLCSL’s outstanding reputation in all these regards will help us to further strengthen our own position, as well as fulfil our overall strategic objective to diversify and grow our operational capacity towards ever-improving efficiencies for our customers.”