Gary Johnston, organising regional secretary for the Bakers Food and Allied Workers Union (BFAWU), told FoodManufacture.co.uk: “Unemployment is already quite high in the Valleys and this is a kick in the teeth.”
He said it would be very difficult for workers to find alternative employment. “People will sweat it out,” he said, but he added that the situation was "very disappointing”.
FoodManufacture.co.uk understands M&S has switched the supply contract to Park Cakes, based in Oldham, greater Manchester. Some reports suggest the trade deal was worth £40M.
Sources close to Avana Bakeries claim the loss represents the majority of Avana Bakeries’ business.
‘Majority of employees at risk’
2 Sisters has issued a statement saying that the development had put “the majority of employees at our Avana bakery site at Newport ... at risk of redundancy”.
The firm has admitted that the site has suffered such a blow that it could be forced to close. Although it is understood to be battling to keep the site open, it remains to be seen whether or not alternative business can be found to plug the gap left by M&S.
2 Sisters has begun a consultation process with unions and employees in a bid to find staff other jobs. One possibility is that workers could be offered the chance to transfer to 2 Sisters’ RF Brookes site at Rogerstone, Gwent.
“Clearly this is a huge setback to our cakes business and our operations in Wales, but we are determined to work hard to reverse the situation,” said 2 Sisters in a statement issued today (February 7).
‘Minimise the impact’
“As a matter of urgency, we are now making every effort to rebuild the business by seeking alternative customers and opportunities which will minimise the impact of this contract loss.
“Our immediate priority now is to have meaningful discussions with our colleagues during a minimum 45-day consultation period to explore all available options before taking the next steps. We are hopeful that we can retain our cakes business in Newport.”
M&S issued a statement explaining the decision. “As part of our work to further improve the quality of our food supply chain, we are consolidating some of our fresh desserts and cakes business and moving from two suppliers to one.
“It’s not a decision we’ve taken lightly and we understand that it will have a significant impact for Avana Bakeries. We’ll do all we can to support the supplier through the process.”
One source close to Avana Bakeries said it had never recovered after 2 Sisters sold its Christmas pudding production to satisfy competition authorities after it bought Avana Bakeries from Premier Foods.
“The problems started for Avana when it sold off its Christmas puddings business - that made it very difficult for the company, so I'm not surprised about this in a way.”
Meanwhile, Park Cakes has rejected BFAWU claims that it is preparing to introduce cheap agency labour after winning the lucrative M&S contract.