January in a food manufacturing business should be about forward planning: reviewing last year’s output figures, setting sales and production targets, and perhaps finally approving that long debated investment in new plant or automation. Instead, for an alarming number of business owners, it becomes the month when they finally admit what they have known for months, maybe years: the ingredients that made their partnership work are not there anymore.
The operation keeps moving and the orders keep coming in. But the relationship with the person you built the business with, the one you trusted to share the risk and the reward, has quietly deteriorated into something toxic. And when key decisions need to be made quickly and with unity, a fractured partnership does not just create tension. It can put the entire business at risk.
Across the UK, hundreds of food manufacturing partnerships thrive in an industry known for its breadth and diversity. Many co-owners work together successfully for decades when the fundamentals are aligned: complementary skills, shared goals and mutual respect. Yet as another year begins, it forces an uncomfortable stocktake for some. The festive break offers space for reflection, and not all business owners like what they see when they examine the relationship honestly.
The trajectory is often predictable. What began as mutual admiration becomes tolerance, then resentment, and finally something approaching contempt. Your co-founder, the person you once trusted enough to put your house on the line for, now triggers irritation the moment they walk through the factory gates.
Successful co-ownership requires equilibrium: partners of comparable age and life stage, similar financial investment, and crucially compatible visions for where the business should head. A shared destination.
The classic setup pairs experience with energy. One partner brings established customer contacts and industry knowledge built over years, while the other contributes hunger, the long hours and expertise in newer production technologies.
This arrangement works well initially, but divergence is common. In any manufacturing businesses, the fault lines are familiar. One owner remains hands on with production processes and quality control, while the other moves toward client management and growth strategy. One pushes for major capital expenditure, perhaps for improved automation, while the other prioritises cash extraction and dividends. One wants to expand the product range or enter higher margin sectors, while the other prefers to concentrate on legacy revenue streams. Perhaps one is planning to exit within five years, while the other expects to run the business for decades.
Despite all this complexity, the single most common trigger for shareholder conflict is remarkably simple. One owner concludes the other is not pulling their weight while still taking half the profits. In manufacturing, this perception is especially corrosive. Is landing contracts equivalent in value to keeping operations running efficiently? Does client acquisition match the contribution of the person ensuring goods go out on time, to specification, with traceability and compliance? When these questions are not confronted openly, they quietly poison the partnership.
Once animosity takes root and remains unaddressed, the rot spreads. Recovery becomes increasingly unlikely, leaving separation as the only viable option.
Court statistics tell a revealing story. Analysis of litigation data suggests shareholder dispute cases trebled in 2024 compared to previous years.
Commentators frequently blame post pandemic pressures, but I am sceptical that macroeconomics fully explain the trend. My experience mirrors the data. Clients are increasingly willing to pursue formal proceedings earlier, despite the substantial cost litigation entails.
The legal framework governing shareholder disputes has not changed to justify this size of increase in litigated cases. These cases always come down to two fundamental questions: which party exits the business, and what they are paid for their shares. Everything else is tactical positioning, or less politely ‘theatre’.
By the time clients seek my assistance, relationships are usually at crisis point. The antagonism drives behaviour that would have been unthinkable years earlier.
Just how irrational can it get?
Just how irrational can it get? Consider what unfolded at a company in Saffron Walden, Home and Office Fire Extinguishers Ltd. One co-owner launched a physical assault on the other using a hammer. The case became a legal teaching example from the point of law it clarified but become more widely known because of the extreme behaviour of the co-owner.
Consider what unfolded at a company in Saffron Walden, Home and Office Fire Extinguishers Ltd. One co-owner launched a vicious physical assault on the other using a hammer. The weapon had been purchased with company petty cash. The receipt was left in the petty cash box. Methodical enough to reclaim the expense, irrational enough to commit assault. The case became a legal teaching example from the point of law it clarified but become more widely known because of the extreme behaviour of the co-owner.
The term ‘corporate divorce’ exists amount solicitors dealing with shareholder disputes for good reason. These disputes trigger emotional reactions that eclipse rational judgement.
The damage extends far beyond the feuding owners. Management focus evaporates. Decision making deteriorates. The business suffers from inadequate oversight. Employees quickly sense the tension, creating uncertainty that unsettles the workforce or prompts skilled staff to look elsewhere.
For food manufacturers operating on tight margins, where production efficiency, uptime and the retention of experienced people determine profitability, this collateral damage is dangerous. Delivery schedules slip. Scrap rates rise. Compliance issues creep in. And the reputation you have built with demanding customers can vanish within a single review cycle.
Clients frequently lose sight of the two core issues, who is leaving and the value of their shares, and instead become consumed by prolonged solicitors’ correspondence. This almost never produces a positive outcome, and it certainly harms your legal fee budget.
Guidance for new ventures
If you are embarking on a manufacturing venture with a new partner, take the time to discuss long term objectives and put a comprehensive shareholders agreement in place. Address succession scenarios, retirement timelines and how you will quantify different contributions including operational expertise, customer relationships, technical capability or investment. Do not assume that a shared understanding of manufacturing processes equates to shared priorities.
If you are already in a deteriorating partnership, accept that avoidance only intensifies the problem. Without proactive engagement from both parties, the situation will worsen, not improve. Addressing issues early remains the most effective way to avoid an expensive legal process.
The external environment will test UK food manufacturers enough in 2026, including stubbornly high energy costs, raw material volatility, certification challenges, export friction and acute skills shortages. Do not compound these pressures by allowing internal conflict to undermine everything you have built.
Here is to a successful 2026.
About the author
Barney Leaf is a corporate partner at Primas Law. He has over 30 years experience of handling shareholder disputes and corporate transactions.
