13 May 2008


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Northern Foods to mothball plant as £45m M&S deal collapses

Northern Foods

Marks and Spencer

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Ready meals supplier Northern Foods is to mothball a plant in Grantham, Lincolnshire, after it pulled out of a deal to supply Marks & Spencer.

Marks and Spencer store

The plant closure could cost up to 730 jobs.

Northern Foods said: “Following negotiations with Marks & Spencer, and by mutual agreement, Northern Foods has resigned supply of most of the M&S product lines produced at our Fenland Foods ready meals facility.

“This is in accordance with our strategy to continue with business only where terms generate an adequate return for the Group's shareholders.”

The products produced at the plant accounted for £45m in annual sales.

Northern Foods chief executive Stefan Barden said: “We believe that chilled foods is an attractive growth market and that our ready meals are the best in the industry.

“We have recently invested over £20m to acquire the Ethnic Cuisine ready meal business and the Grimsby soup plant, together with a £9m investment to expand our salads business.

“The Fenland facility would remain mothballed whilst we explore opportunities to secure profitable new business with other customers for the site. We have plans to invest in the site so that it can continue to be a leader in its market.

“Our immediate task is to support our loyal employees through the consultation period.”

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