19/11/2012 16:24 GMT

Dutch Food Company Vion NV To Sell UK Businesses

A Dutch food group is to sell its UK businesses which employ 13,000 people at 38 sites across the country.

Vion NV said the sale was to allow it "to concentrate on its core markets in the Netherlands and Germany and the development of its global ingredients business".

The company began the closure of Halls of Broxburn meat processing plant in West Lothian last month after rejecting two last-minute bids for the business. Vion said neither of the offers was a "viable and sustainable alternative" to the closure.

The Halls factory is making losses of £79,000 a day and is due to close by February with the loss of 1,700 jobs.

Vion said it is confident that it will sell its UK pork, red meat and poultry business units as viable businesses.

Peter Barr, chairman of Vion UK, said: "Working with our advisers Rabobank/Rothschild, we have already started detailed discussions with a number of interested parties, including management, regarding the acquisition of the various parts of the UK business and these are progressing well.

"The level of interest in the businesses has been strong and we hope to be in a position in the near future to give further details about the progress which has been made.

"The sale process will be completed in a smooth and orderly fashion to ensure business continuity for our employees, agricultural and other suppliers, and our customers."

Vion owns Key Country Foods, Tranfield and Grampian Country Food Group, which it acquired in 2008.

The company supplies beef, lamb, pork and chicken products to a range of food retailing and manufacturing customers.

Last month, Vion announced that it had agreed the sale of its US-based Banner Pharmacaps, a manufacturer and developer of soft gel caps for the pharmaceutical industry.

Scottish finance secretary John Swinney said: "This is an extremely disappointing announcement. I recognise that this will be a particularly worrying time for Vion employees.

"The Scottish government has been involved in protracted dialogue with Vion over the last few months where we have repeatedly asked for reassurance on future of other plants in Scotland. This information has not been forthcoming.

"Today's announcement is the first that the Scottish government has heard of the sale of the other businesses from the company and we will be engaging with the company to maximise the opportunities for business continuity and provide support, where possible, to employees."

Rural Affairs secretary Richard Lochhead added: "Clearly this news will be a concern for Scotland's farmers, Vion employees and suppliers, particularly coming hard on the heels of the Halls of Broxburn closure.

"Here in Scotland we are renowned for the high quality of our food and drink thanks to our fine natural ingredients. Food and drink is a growth sector and we will work hard with industry stakeholders and others to ensure that this can continue."

John Gorle, Usdaw national officer for Scotland, said: "I'm extremely concerned by Vion's decision, which has come right out of the blue and will be a real shock for our members and all the company's workforce.

"There will undoubtedly be questions raised about the future viability of Vion's UK food businesses, but Usdaw is firmly of the view that these can be secured with the right management, investment and strategic approach in place.

"Vion also has some explaining to do about its recent decision to close Hall's of Broxburn. Today's announcement clearly hasn't been made overnight and it makes the veracity of the consultation process at Hall's questionable at best."