Industry 'shocked' by Vion withdrawal from UK

21 November, 2012

The meat industry has been left shocked after the sudden announcement by the UK’s largest meat processor that it is to quit the UK market.

The announcement by Vion on Monday ended months of speculation about the future of the struggling company, which has suffered a series of setbacks and, most recently, was forced to close its pork processing unit, Hall’s of Broxburn.

The Dutch-owned company, which originally entered the UK market in the late 1990s, became a major player with the purchase of the Grampian Country Food Group in 2008 and, at the time, declared the UK to be its third home market. However, it has now put its UK operations up for sale and is retreating to the Continent to “concentrate on its core markets in the Netherlands and Germany”.

The move has sparked concern across the industry from employees, suppliers and customers. National Farmers’ Union chief livestock advisor Peter Garbutt said: “This will be of obvious concern to Vion’s poultry and livestock farmer suppliers, supermarket customers and, I’m sure, its staff as well. We have been reassured by the comments from Vion UK chairman Peter Barr and the NFU will be getting in contact with the company to better understand the potential implications for our members.”

Jim McLaren, chairman of Quality Meat Scotland, said: “Today’s announcement by Vion of its intention to withdraw from the UK market will send shockwaves through the Scottish red meat industry. It is vital we maintain critical mass in our Scottish livestock industry to ensure the long-term sustainability of our brands and profitability in each link of the supply chain.

“We look forward to a positive outcome from the sale of the red meat processing plants, which are strong operations with a good customer base and should prove attractive to prospective buyers.”

Union bosses have expressed concern about the news, with some expressing anger at the lack of communication from within the business. John Gorle, national officer of union Usdaw, said he was “extremely concerned” by Vion’s decision, saying it had come out of the blue and was be a shock for its members and the company’s workforce.

He said: “There will undoubtedly be questions raised about the future viability of Vion’s UK food businesses, but Usdaw is firmly of the view that these can be secured with the right management, investment and strategic approach in place.

“Vion also has some explaining to do about its recent decision to close Hall’s of Broxburn. Today’s announcement clearly hasn’t been made overnight and it makes the veracity of the consultation process at Hall’s questionable at best.”

Meanwhile, Stephen Rossides, director of the British Meat Processors Association, said the move reflected the tough market conditions: “Vion’s decision highlights the difficult commercial trading environment for many UK food businesses right now. The company is a major player in all the meats, and its exit from the UK raises many questions as to how the market and remaining UK meat companies will respond and adapt to the new circumstances.”

Vion employs more than 13,000 people in multiple sites across the UK, and the company said it was confident it would be able to sell all its UK pork, red meat and poultry business units as ongoing viable businesses.
 
In a statement yesterday, Vion CEO and executive board chairman Dirk Kloosterboer said the decision to withdraw from the UK had not been an easy one, but was “essential”. It said that creating a smaller company, concentrating on core Dutch and German food production followed the strategic reorientation announced in June.


Related News:

>Scottish minister hopeful of buyers for Vion

>Vion to sell UK operations

>Big changes at Vion following ‘disappointing’ results






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