Avara Foods has announced proposals to close its Abergavenny factory in south Wales, with as much as 400 jobs at risk of being lost.
The poultry giant said it would start a staff consultation at the site “in the coming days” and is proposing to shutter the facility – which cuts and packs turkey and chicken products for retail customers – by the autumn.
Avara cited the impact of the covid pandemic, alongside inflationary pressures in fuel, commodities and labour as key drivers behind its proposal to close the site. These factors had “driven up pricing and significantly reduced demand for UK-produced turkey in the retail market”.
To maintain “a competitive customer offer”, Avara had subsequently started to re-engineer its turkey business “to operate a more efficient operational footprint focused on fewer, better invested facilities”, the supplier said.
“Over the past six months, the company has looked in depth at a range of options to enable its wider business to compete effectively in the market in the future,” it added. These included different potential uses for the site.
However, this process identified that volumes could be processed more efficiently in other operations and with lower capital investment, a spokesman for the business pointed out, resulting in its proposal to close the Abergavenny facility.
“This difficult decision has not been taken lightly and in no way reflects on the hard-working colleagues. The nature of this consultation means that no final decisions have been made and there will be no speculation as to how the process will conclude.”
The Abergavenny factory was acquired by Avara predecessor Faccenda when it purchased turkey processor Cranberry Foods in 2012.
The supplier’s proposal comes a week after 2 Sisters Food Group president Ranjit Singh Boparan told The Grocer that a poultry sector contesting with “wafer thin” and often negative margins was at “breaking point”.
The price of chicken had been “more or less the same” in the supermarkets over the past year, with some of the lowest inflation rates in fresh food, despite soaring production costs, Singh said. 2 Sisters recently closed its Llangefni factory on Anglesey in north Wales, citing similar concerns over high production costs.
Avara fell to a loss of more than £16m last year, with high production costs described as a major contributor alongside lower demand and “significant” labour challenges, its accounts, published in February showed. Turnover grew, by 5.8% to £1.26bn for the year to 31 May 2022.