Manufacturers crumble under retailers’ pressure

Food manufacturers are crumbling under the “immense pressure” put on them by retailers, warned Unite the Union recently. The warning comes after one of Marks & Spencer’s (M&S’s) suppliers, Tulip International, revealed plans to close a factory.

Unite revealed to Food Manufacture​ that its representatives visited Tulip International on January 7 to discuss workers’ pay. Instead, they were faced with the announcement that the firm would be launching a 90-day consultation on the closure of its meat processing site in Bromborough, in the Wirral, which employs over 300 people.

Tulip International’s announcement came on the same day that M&S revealed it would close 25 of its Simply Food convenience stores, and reported that total like-for-like food sales were down by 5.2% for the quarter.

“Although Tulip is saying that there is no link with the closure of the stores, it’s more than just a coincidence,” said Franny Joyce, regional industrial organiser for Unite. “Marks & Spencer is the site’s main customer.”

Tulip opened the Bromborough site 10 years ago because its other facilities were not up to the standard that M&S required, Joyce said. “But now, because retailers are putting immense pressure on food manufacturers to produce cheaper food, Tulip is following suit and is cutting costs by folding the volume into its other existing sites,” he added.

Tulip told Unite that the volume will be transferred to its sites in Kings Lynn and Boston, Lincolnshire. The firm blamed the proposals on “overcapacity in the food sector, combining with the economic climate”

One industry source added: “It is just another example of the race to the bottom that food manufacturers have found themselves in because of pressure from the retailers and supermarkets to produce cheap food. Government needs to step in to protect them, otherwise the UK will see a severe decline of decent manufacturers.”