The supermarket is transferring much of its salads procurement to its own business, International Produce Limited, in Normanton, Wakefield. As a result, Bakkavör has started a 90 day consultation with the 203 staff at the EVS sites in Selby and Newport in North Yorkshire, with more than 100 redundancies anticipated.
Employees at risk
A Bakkavör spokesman told FoodManufacture.co.uk the firm planned to reorganise its packing operations at the sites, which also produce loose and pre-packaged salads for other supermarkets. “Despite growth with other customers in both the retail and foodservice sector, the business has no option but to consult with staff in order to adjust the scale of its operation,” he said.
Bakkavör had begun consulting with all of the hourly paid staff at both sites, the spokeman said. Of 203 employees at risk, it is estimated that there could be up to 84 hourly paid redundancies. Of the 68 salaried staff, 47 employees are at risk with 23 proposed redundancies.
The spokesman added: “The only objective is to ensure the long-term viability and sustainability of EVS, and we are liaising closely with employee representatives and the union on the consultation.”
Sign of things to come?
Asda’s IPL division was formed six years ago, with Bakkavör as a shareholder. In October 2009 IPL was bought out by Asda and already manages all fruit categories exclusively for the supermarket.
Major initiatives during 2011 include the extension of IPL's remit in fresh produce for Asda, as well as the development of wine- and bacon businesses; IPL also has a second site in Sittingbourne, Kent.
Bakkavör shed 179 jobs in mid-January at its Prepared Produce site in Bourne, Lincolnshire. It also closed its Exotic Farm Produce factory in mid-May, with up to 66 of 115 staff facing redundancy.
The Bakkavör spokesman refused to comment on whether these redundancies were connected with any loss of Asda contracts. The company blamed the problems at the Exotic Farm Product site (which produced fresh produce) on the loss of a major contract.
Ongoing trend
David Jack, a former food industry executive (Clifford Foods, Orchard House Food) who now consults for Pride in Food said: "It [supermarkets producing produce in house] has been going on for decades already, and I think we'll see an ongoing trend."
However, he emphasised that a "completely different ethos" meant that retailers moved into categories such as bakery and fruit, only to pull out again. "They discover that procurement and staffing issues are more problematic to deal with than when you're standing in a nice warm supermarket."
So in light of the Bakkavor news, what did he think UK food and drink manufacturers could do to avoid retailers opting to go in house? "Be more innovative, as well as competitive. The bigger you are, the bigger the wound is when you lose a major contract, but that's where the major money is. You pays your money and you takes your chance."