Editorial: Major Takeover in European Processing Sector

This week, the Dutch-based food producer VION NV announced the sale of its red meat and poultry businesses in the UK to Boparan Holdings Limited, the holding company for 2 Sisters Food Group.

The acquisition by 2 Sisters secures a viable future for these businesses, as well as providing certainty to their UK supply chain, which is underpinned by British farmers.

The fate of the processing plants in the UK had been under threat since VION announced its decision to pull out of the UK market to concentrate on its operations in the Netherlands and Germany in November last year.

In January, a management buyout secured the future for the pig meat sector for VION UK and now the beef and lamb and poultry operations have been thrown a lifeline.

However, there is still uncertainty over the future of the Welsh Country Foods plant in Wales, after it lost a major supermarket contract.

The acquisition will help to meet growing demand from 2 Sisters' poultry customers and further diversifies the company's offering to include red meat, supporting 2 Sisters' strategy of serving more meal occasions.

VION's poultry and red meat businesses are suppliers of poultry, beef and lamb to the retail and food service sectors in the UK and Europe. They have 11 processing sites in the UK and approximately 6,000 employees and have suffered from challenging trading conditions, in particular in poultry, with the loss of a number of major contracts.

Meanwhile in Europe, the scandal over the presence of horse meat in products labelled as containing beef rumbles on.

Tests for 2,500 products in Europe are being carried out and further evidence of contamination of products is being discovered, with burgers produced in Poland and exported to the Czech Republic found to have horse DNA.

Consumer surveys have started to show a shift in buying patterns, with consumers choosing different products.

However, during the National Farmers Union conference in Birmingham last week, NFU President Peter Kendall used his opening address at Conference 2013 to argue that the horse meat scandal shows the need for a major shift in the way food is delivered.

Mr Kendall said one of the lessons to be learned from the current food scandal is that the great British consumer wants their food to be produced as close to home as possible.

"This boils down to a clear and simple message: we need shorter supply chains which source from British farmers and growers," he said.

"We must make that our collective ambition. But if British farmers are to deliver more of what the British consumer buys, it’s going to take a major shift in the way the food supply chain operates."