Consultations with affected staff began on 29 April. Food Manufacture understands the business was projected to make a financial loss, hence Avara Foods' decision.
A spokesman for the wider company stressed the challenges facing the duck business were not COVID-19-related in origin and the rest of the business had been operating throughout the pandemic.
However, Avara Foods said while not causes in themselves, recent developments with Brexit and COVID-19 had exacerbated the situation, particularly the significant drop in sales volumes as a result of catering and food service closures. While the challenges might have been temporary, the underlying market conditions seriously undermined the viability of the business, it added.
Cherry Valley Foods
Cherry Valley Foods was bought in 2015 by Faccenda Foods, which later formed Avara Foods as a UK joint venture with US poultry giant Cargill. The Cherry Valley name was changed following the acquisition. The deal had given Avara a unique position in the market as the only producer of British chicken, turkey and duck, it said. At time of purchase, it claimed annual turnover of £45m. However, in recent years, despite significant investment in the duck business, external market conditions had become increasingly challenging with feed costs, feather pricing and European competition all combining to put the business under immense pressure.
Commenting on the proposal, chief executive Andy Dawkins said: “This has been an incredibly difficult decision and one that reflects a market that has gradually deteriorated over several years.
"Despite investment in the business and the best efforts of all involved, the market has reached the point where the business is no longer sustainable, with no clear route to recovery.
"We are now committed to a meaningful consultation process and, if our proposal goes ahead, providing the necessary support to everyone affected and a smooth transition with all our trading partners.”
Poultry business Avara Foods was formed in 2018 as a joint venture between US giant Cargill and UK firm Faccenda Foods. In January 2020, it announced its turnover had topped £1.1bn in the year to 31 May 2019, its first year of trading. Alongside this, it declared profit before tax of £13.7m. It is one of the UK's largest food processors, employing 7,000 people across chicken, turkey and duck operations.
