Of the 680 employees currently at the site, Bakkavor said it was confident that it would be able to offer 520 members of staff alternative roles across its other Lincolnshire sites, minimising the impact of redundancies.
A spokesman for the business, which announced yesterday (28 February) that it had doubled its latest full-year pre-tax profits, confirmed that it was commencing a 45-day consultation period with employees based at the site.
“The management team has explored a number of different options to improve the performance of the site but has concluded that Freshcook is no longer commercially viable,” they said.
“If this proposal goes ahead, we are confident that we can offer the weekly paid employees alternative operational roles across our other Lincolnshire sites and we will make every effort to relocate other employees impacted wherever possible within Bakkavor Group.”
Bakkavor annual results
On 28 February, Bakkavor announced in its results for the 52 weeks ended 29 December 2018 that it had doubled pre-tax profit to £77.9m from £39m in the previous year. Group like-for-like revenue rose 3.2% to £1.84bn from £1.78bn the year before. This included 1.8% growth in the UK.
Chief executive Agust Gudmundsson hailed the "robust performance". He was cautious about further growth in the short term, claiming profit margins would get tighter, but added: "However, in the second half, we anticipate an uplift in UK revenues as we benefit from recently secured new business.
"Given this additional volume, together with the actions we are taking to protect profitability, we expect a significant improvement in our trading in the second half of the year and our full-year group performance to be broadly in line with 2018."
The company stated that the expansion of its UK desserts site was progressing well and the acquisition of Haydens Bakery was already delivering benefits.
Bakkavor operates in the fresh prepared foods sector, employing more than 19,000 people across the UK, China and the US. It currently has 25 factory sites and three distribution centres in the UK.
This week also saw Valeo Foods Group-owned Big Bear Confectionery announce plans to close its Leicester site as part of its merger with Tangerine Confectionery.
The Union of Shop, Distributive and Allied Workers (Usdaw) said the news of the closure was devastating for workers.
Alex Fraser, Usdaw area organiser said: “It would also a blow for Leicester to lose the iconic Foxes Glacier Mints brand, which is in its centenary year.
“We will now enter into meaningful consultation talks with the company, where we will examine the business case for the closure of this site. In the meantime we are providing our members with the support, advice and representation they require at this very difficult time.”
Meanwhile, more than 400 jobs at Tulip’s Boston site are at risk, after losing a major supply contract with upmarket retailer Marks & Spencer.
The meat processor confirmed the site, not far from the Freshcook factory, would soon commence collective consultation with the site works committee over the potential loss of 464 jobs. Existing commercial commitments will come to an end in August this year.