Administrator hopes for quick sale of Morrisons bakery supplier

By Ben Bouckley and Anne Bruce

- Last updated on GMT

Related tags International trade

Administrator hopes for quick sale of Morrisons bakery supplier
The administrator of Woodhead Bakery has confirmed that it is in “detailed discussions” with a number of potential buyers for the firm, which counts Morrisons as a customer.

Joint administrator Christopher White, from the P&A Partnership, said: “Negotiations are at an advanced stage with prospective buyers who we are unable to name at present. We are hopeful of securing a sale of the business within the next seven days.”

A P&A Partnership spokeswoman told that she couldn’t say at this stage whether the interested parties would continue production at the craft bakery's factory in Scarborough, or whether 280 jobs at the firm would be secure as the result of any deal.

Woodhead Bakery originally went into administration on March 29, with 30 of its 310 staff made redundant; the company has a £9m turnover and a factory in Scarborough; it also supplies 30 bakery shops.

Offers for business

Sheffield-based P&A Partnership said thereafter that it would take offers for the whole business or its component parts, including Woodhead's high-volume savoury production facilities.

White blamed inflation, rising global wheat prices and harsh economic conditions on the high street for Woodhead’s difficulties.

The 74-year old business has continued to trade in administration, and White said: “We believe that by continuing to trade, we have the best chance of finding a buyer and we have retained as many employees as we possibly can.”

Spiralling sector costs

Woodhead’s woes reflect difficulties for firms active in the UK’s £4.4bn bakery industry (2010 estimate based on Office of National Statistics figures) with input costs “spiralling out of control”​, despite the UK’s virtual self-sufficiency in wheat.

Research firm Key Note wrote in a recent 2011 report​ on the sector: Russia’s recent export ban on wheat has forced other countries to look elsewhere for wheat crops, with the UK being a prime location to pick up such trade.

UK exports increased by 50% in October 2010 alone, making it more lucrative to export the crop rather than keep it for domestic use. This caused some uncertainty in the market and instigated further price increases as result, for both domestically-grown wheat and crops imported from overseas.”

High ernergy prices had also negatively impacted on producers’ margins in recent months, Key Note said, “as there are only so many costs that manufacturers can feasibly absorb before they must be passed on to the consumer”.

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