In a desperate attempt to save its Rogerstone bakery from closure, Avana Bakeries is actively seeking new business after it lost a multi-million-pound contract with Marks & Spencer (M&S).
The contract, believed to be worth in the region of £40m, was lost to Park Cake Bakeries in Oldham, and existing supplier of cakes to M&S.
Gary Johnston, organising regional secretary at the Bakers Food and Allied Workers’ Union (BFAWU), told British Baker that the bakery had been producing St Michael branded goods for M&S for around 77 years, and the contract made up around 85% of Avana Bakeries’ business.
He added: “I know the company has been approaching other supermarkets, and we are hopeful this will result in new business.”
Around 650 jobs are currently at risk at Avana’s bakery in Newport, and there is “also a risk that the site could be closed”, said a spokeperson from parent company 2 Sisters Food Group.
She added: “As a matter of urgency, we are now making every effort to rebuild the business by seeking alternative customers and opportunities which will minimise the impact of this contract loss. We are hopeful that we can retain our cakes business in Newport.”
Johnson said the workers were “shocked and confused” and unsure of where they stand, but that “hopefully the next few weeks will shed more light on the situation”. A minimum 45-day consultation period began earlier this week, with the union keen to uncover the politics behind M&S’ decision.
However Johnston added that the sale of Avana’s Christmas pudding business in October 2012, following competition concerns, could have been a factor.
Park Cakes has recently come under fire from representatives at the Bakers Food and Allied Workers Union regarding its employment practices.
It has been reported that the union has claimed Park Cakes is increasing its use of cheap agency labour, and squeezing the pay and conditions for its permanent staff.
A spokesperson for Park Cakes confirmed that a pay freeze has been implemented across the board, however he stated: “No staff employed directly by Park Cake Bakeries are on zero hours contracts or ever have been. It is not true that the company has appointed a new agency or eroded terms and conditions.”