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Premier Foods to cut 900 jobs at its bread division

20 November 2012
Premier Foods to cut 900 jobs at its bread division

Premier Foods, the maker of Hovis, is cutting 900 jobs at its bread division and is closing two bakeries.

According to the BBC, the UK's largest brand food producer, who also recently announced the sale of another of its iconic brands Branston Pickle to Japanese vinegar manufacturer Mizkan, said it would close two bakery sites in Greenford, west London and Birmingham sometime in 2013.

Announced as a further step to build value in its bread business and drive growth through simplifying manufacturing and distribution operations the two additional closures come in addition to a previously announced closure of the Eastleigh bakery

In addition, it is proposed to simplify the bread distribution network by removing approximately 130 distribution routes.

Michael Clarke, chief executive officer of Premier Foods said: "Having generated solid growth momentum in our grocery division, it is critical that we act to assure the long-term future of the bread division.

"By simplifying our cost base, we can increase focus on improving efficiency, quality and service levels to help grow our core Hovis business.

"We recognise the impact these actions will have for our employees at the sites affected. Decisions will not be taken lightly but they are necessary if we are to build a strong and successful future for the bread division and those who remain with our business."

Consultations with employees affected by the proposals and their representatives have begun.

Charges associated with these proposals are expected to be approximately £28m and will be reflected in the company's 2012 and 2013 financial statements.

The company expects to recover the majority of the cash impact of the proposed changes in future periods through realising site disposals, reduced working capital requirements and lower capital expenditure.

The food service side of the business will not be affected by these changes.

Premier Foods wins four-year deal to supply bread to prisons >>

Japanese firm buys Branston pickle in £92.5m deal >>

By Lisa Jenkins

E-mail your comments to Lisa Jenkins here.

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