October 3, 2017 / 6:38 AM / 2 years ago

Britvic cuts 240 jobs in Norwich closure, Unilever could follow

(Reuters) - Britain’s Britvic Plc (BVIC.L) announced the closure of its Norwich factory on Tuesday, putting 240 jobs at risk and prompting fellow consumer goods producer Unilever to warn it might follow suite with a neighbouring plant.

FILE PHOTO - Bottles of soft drinks made by drinks company Britvic sit on a conveyor belt at Britvic's bottling plant in London March 25, 2009. REUTERS/Luke MacGregor

Britvic said it would transfer the production of its Robinsons and Fruit Shoot brands from the Norwich site, which is co-owned with Unilever (ULVR.L), to plants in East London, Leeds and Rugby.

Unilever, which makes famous English mustard brand Colman’s on the same site in Norwich, said it was launching a review of its production at the plant, with options including closure.

Britvic cast the decision to close the site as part of a 3-year, 240-million-pound restructuring programme the company began in 2015 to reorganise their British operations.

“We know this is upsetting news,” chief executive Simon Litherland said. “However the changes we are proposing today present significant productivity and efficiency savings in our manufacturing operations.”

Consumer demand in Britain has borne the brunt of a rise in inflation to its highest in nearly five years, largely due to the pound’s tumble since last year’s vote to leave the European Union.

The weaker pound has also pushed up costs for manufacturers who import ingredients, leading some companies to raise prices, sell key businesses or move manufacturing facilities out of Britain.

The regular PMI survey of manufacturing sentiment on Monday showed a slowdown in growth that overall has remained solid.

Trade union Unite, which expressed “concern for the future of Colman’s Mustard brand”, said Unilever is expected to conclude its review by the end of November.

Britvic said their plant will close by the end of 2019.

The company, which also makes J2O and Tango drinks, said the proposed closure would not affect its financial forecast. The job cuts also come at a time when the company and its rivals including A.G.Barr (BAG.L) face an impending British government tax on sugar-sweetened fizzy drinks.

Additional reporting by Noor Zainab Hussain, editing by Louise Heavens, Jason Neely and Patrick Graham

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