40 jobs are threatened at logistics firm Swansea Bakeries Limited (SBL) amid proposals to shift its contract to handle logistics for Premier Foods’ Hovis brand to Hovis’ Avonmouth depot.
The move would end a 15-year commercial relationship between Hovis and the third party logistics provider, based at St David’s Industrial Estate, Llansamlet, Swansea Enterprise Park, south Wales.
FoodManufacture.co.uk understands the proposal is not part of a wider strategy and other third party logistics firms would keep their Hovis contracts.
It was motivated by a decline in direct-to-store deliveries within the area covered by Swansea Bakeries, one source claimed.
Jonathan Hughes, md of Swansea Bakeries, told FoodManufacture.co.uk the company had now entered a 30-day consultation period with staff, adding: “All staff, including directors, have been given risk notices.”
But he stressed the job losses would only occur if the lost business could not be replaced.
Following local media reports, the company issued a statement saying: “Swansea Bakeries is currently consulting with employee representatives after it was announced last week that Hovis proposes to operate the work currently undertaken by SBL through their existing network.
“SBL directors will do everything to mitigate this loss by exploring all other options available. We are currently in discussion with two distribution operations.
“SBL has enjoyed an excellent working relationship with Hovis over the past 15 years and it is with regret that we find ourselves in this position. We will do everything we can to assist all our employees.”
In a statement, Hovis said: “Swansea Bakeries undertakes daily deliveries of Hovis bread and bakery products to our major customers' stores in the south west and west Wales area.
“A review of our customers, volumes and routes in that area has shown that it is more efficient to undertake these deliveries direct from the Hovis distribution depot in Avonmouth.
“This is by no means a reflection on the quality of people or service at Swansea Bakeries and we'd like to thank the team for their hard work and commitment to Hovis over many years.”
The development follows January’s announcement of an £87.5M joint venture between Premier Foods and The Gores Group, based in the US.
The deal allowed Gores Group to run Premier Foods’ Hovis bread and flour business, freeing Premier up to focus on investing in other category-leading ambient grocery brands.
Then in May, GE Capital announced it was providing an £80M credit facility to finance the future growth of the Hovis brand.