2 Sisters Food Group has unveiled a “rescue plan” for its Scottish business as it grapples with a general oversupply of poultry in Scotland and falling consumer demand.
The package of measures includes the sale of 2 Sisters Letham site in Angus, which processes uncooked poultry for supermarkets and food service customers, and around 200 job losses at its Coupar Angus site in Perth & Kinross.
A 2 Sisters spokesman would not confirm to whom the Letham site had been sold but 2 Sisters said it had “found a buyer who will tap into new niche market opportunities, where it will [be] much more competitive in the marketplace”.
It also plans to decrease production at its Coupar Angus site in Perth & Kinross by reducing the workforce and changing shift patters and working hours for the remaining staff.
2 Sisters was “working with our colleagues to maintain a viable operation at our factory” to allow it time to create a more competitive environment “as we look to strengthen Scottish sales and build demand for Scottish chicken”, the company said in a statement.
The plan would help secure the viability of the poultry industry and give it a better opportunity for future growth and success, it added. “Taking no action would put the future of our industry in Scotland at serious risk.”
2 Sisters added: “We will work with all our partners - our colleagues, our customers, our agricultural base, the Scottish Government - as we can’t do this alone. We need their help to rescue the industry.”
A spokesman said the business had been hit by a general UK poultry market decline of 4.3% and highlighted the changes in retailers’ promotional strategies from BOGOFs to ‘three for £10’ deals, as well as changes in consumer buying habits.
Government response
The news prompted Richard Lochhead, Scottish rural affairs secretary, to publish a press statement last night.
“I am fully aware that there may be wider implications for Scotland’s poultry sector, and the various ancillary businesses that support the sector, following these developments and I will strive to do all I can to ensure any impact is minimal.”
He had already held discussions with Nigel Miller, president of the National Farmers Union of Scotland, and would look to speak to other key industry figures in the coming days “to discuss our plans going forward”.
Last month, Boparan Holdings – the holding company of 2 Sisters – reported like-for-like sales in its protein division up 9.2% year on year for the 12 months to 27 July 2013, and up 18.2% for Q4. However, it warned: “We expect the impact of price inflation to continue to impact volumes in the short term and are working with customers to offer value to consumers.”
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