Aramark loses out to Booker and DHL on prison contract

20 November 2008 by
Aramark loses out to Booker and DHL on prison contract

Contract caterer Aramark has lost a lucrative prison shop contract worth an estimated £40m in annual turnover to a consortium involving wholesaler Booker, Caterer has learnt.

Although the contract did not involve catering, one insider described the deal as "a real money maker" for the firm. The deal, which had gone out to tender, was thought to be netting Aramark an estimated £5m in annual profit, and saw it providing about 1,000 product lines, such as shampoo, chocolate and phone credit, to inmates via a "pick and packaging" service.

In a statement, the Prison Service said: "DHL/Booker have won the contract to supply the Prison Service with goods for prisoners which began rolling out in October. The DHL/Booker bid combines expertise in delivery and logistics with extensive retailing experience and was the most economically advantageous in terms of cost and resilience."

Aramark has also shaken up its senior management team with Simon Biggs, UK sales director, due to leave the company and Robert Salmon, director of Aramark Education, also out. Salmon, who joined from Compass Group's Scolarest division, is believed to have been replaced by Dee Beckett, who headed Aramark's prison business.

In April 2007, the Prison Service awarded two catering contracts worth an estimated £128m to 3663 and British Bakeries. Under the terms of the deal, 3663 is supplying fresh and chilled produce, breakfast and beverage packs and groceries to 128 public sector prisons across England and Wales, while British Bakeries provides bread and morning goods.

Prison shops

"Prison retail (canteen) is a crucial and integral part of the operation of a prison. The opportunity for prisoners to obtain extra products to supplement their daily provisions is a key part of maintaining order and control and a long-standing feature of prison regimes. The amount of money a prisoner can spend is determined by the type of establishment and the privileges that they have earned in respect of their behaviour."
Source: HM Prison Service

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