The firm plans to close the site following an unsuccessful tender to retain business supplying sandwiches and other products to The Foodservice Centre (FSC).
The Wolverhampton site employs 208 full time people. It's contract to supply to FSC, which has run for 18 years, is due to end in June.
Tulip has launched a 45-day consultation period, which begins today (March 20) between Freshway, the employee works council and union representatives over redundancies which may arise from the proposed closure of the site. Workers at the site are represented by the Union of Shop, Distributive and Allied Workers (Usdaw) union.
'The loss of core business'
Kirsty Wilkins, group HR director for Tulip, said: “It is with great regret that Tulip Ltd announces formal consultation over a proposal to close Freshway Chilled Foods following the loss of core business with FSC after 18 successful years.
“The loss of the FSC business will result in a 50% reduction in the site’s turnover, making it economically unsustainable to maintain operations. While we continue to explore ways in which we may be able to secure a future for the business we cannot see a viable alternative to closure at this point in time.”
Wilkins added that a number of options were being discussed as part of the consultation process, including the possible redeployment of employees into alternative permanent roles within the firm.
The business is also studying whether spare capacity across its other manufacturing sites could be be utilised for the remaining business at the Freshway site. Tulip took over Freshway in 2011 with its acquisition of the Parkham Food Group.
'Extremely difficult decision'
FSC Group md James Simpson said: “Following an exhaustive six-month tender process we took the extremely difficult decision to move production away from our long-term producer Freshway Foods.
“We have always been satisfied with the excellent quality and service standards we received from Tulip and Freshway Foods. The decision to move all the private label brands that we manage was based on a compelling commercial case and was key to remaining competitive.”
The business supplies sandwiches and food-to-go products, including bakery products and smoothies and juices, to customers in the UK and Europe. Clients include: Shell Forecourts, BHS and Autogrill.
Last month Tulip invested £37M to expand export facilities in a bid to boost pigmeat exports to China by 25%.
Tulip is owned by the Danish Crown group, which is Europe’s largest pork producer and the globe’s biggest pork exporter. Its UK business operates from 17 sites across the UK and employs more than 8,000 people.