Less than three years after it entered the UK sandwich market through its deal with Parkam Food Group, Tulip is retreating from the sector again.

The company has today launched a 45-day consultation on the closure of its Freshway Chilled Foods business, after Freshway lost a major sandwich contract with The Foodservice Centre.

The contract with FSC, which Freshway has held for the past 18 years, will run out in June.

Tulip said the loss of the contract would reduce Freshway’s turnover by 50%, “making it economically unsustainable to maintain operations”. “Whilst we continue to explore ways in which we may be able to secure a future for the business we cannot see a viable alternative to closure at this point in time,” Tulip group HR director Kirsty Wilkins added.

Freshway employs 208 full-time staff, and Wilkins said the company was exploring the possible redeployment of employees to other Tulip sites.

Tulip does not make sandwiches at any of its other sites, meaning the end of the contract will mark the end of its presence in the UK sandwich market.

Aside from the sandwiches produced for TSC, Freshway also produces sandwich fillers, and Tulip is in the process of working out how it can move their production to its other sites.

Freshway became part of Tulip in late 2011, when Tulip acquired four meat businesses from Parkam Food Group for an undisclosed amount. Tulip is owned by Danish bacon giant Danish Crown.

FSC supplies sandwiches to a range of retail and foodservice clients in the UK and Europe. FSC’s managing director, James Simpson, said: “Following an exhaustive six-month tender process we took the extremely difficult decision to move production away from our long-term producer Freshway Foods. 

“We have always been satisfied with the excellent quality and service standards we received from Tulip and Freshway Foods. The decision to move all the private label brands that we manage was based on a compelling commercial case and was key to remaining competitive.

“The production of FSC sandwiches will be moving to The Sandwich Factory from mid-June and we look forward to developing a strong, long-term relationship founded on a joint vision of high quality, frequent innovation and industry leading customer specific services.”

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