As part of its new focus on the air-dried ham category, Bell Food is to sell the sausage business to the German processor Zur Mühlen Group.
The deal includes the business’ Suhl locations in Thuringia and Börger im Emsland.
“Both companies are an excellent addition to our product range,” said Zur Mühlen Group CEO Axel Knau.
Around 400 employees on the Suhl and Börger sites will be part of the business’ transfer to Zur Mühlen Group. The sale of the sausage business is expected to affect jobs in Bell Food Group’s administration and central services departments in its German division. However, negotiations with employee representatives are scheduled.
In a statement on the sale, Bell Food Group said: “The retail market for meat and sausages in Germany is declining. Due to an oversupply to the market, it is difficult to pass on the sharp rise in the price of pork to sales prices. As its market share is less than 1%, Bell Food Group has a subordinate market position and consequently the outlook is poor. Bell Food Group has therefore decided to sell its German sausage business. In future, business in Germany will focus on expanding the group’s position in the segment for top-quality German and international air-dried ham products.”
Subject to regulatory approval, the sale is expected to reduce Bell’s net revenue by around CHF85m, although it will have a positive impact on its cash flow and EBIT of CHF10m per year from 2020. It is also expected to reduce Bell’s exposure to fluctuations in the prices for raw materials.