Irish food group Glanbia has confirmed that it has been forced to close its UK consumer meat division as a result of worsening trading conditions. The closure of the unit will lead to the loss of around 717 jobs and net losses of around £41 million (€65.7m).
The losses relate to asset write-offs, closure costs and the write-back of goodwill previously written off to reserves. Glanbia said the loss would be treated as an exceptional item in the group's 2002 financial statements.
The Glanbia Consumer Meats division, which supplies the UK retail and food service markets with both premium and standard sliced cooked meats, sandwich meats and convenience foods, has been in difficulty since the second half of 2000, when market conditions began to deteriorate.
The British meat market is suffering from overcapacity, declining margins, high raw material costs and consolidation of supply to major retailers, Glanbia said.
A substantial decline in volume sales, due to come into force next month, as well as the increasingly uncompetitive and inflexible cost base, meant that the UK division had no option but to close, it added.