Source: Alamy 

The deal follows mounting concern over the future of Scotbeef’s plants, plus Scottish processing capacity, after Aldi dropped the supplier earlier this year in favour of ABP

Irish red meat giant ABP has ended weeks of speculation and mounting farmer concern by confirming the acquisition of two major Scottish beef processing facilities owned by rival supplier Scotbeef.

The business is buying Scotbeef’s Bridge of Allan abattoir in Stirling and its Queenslie meat packing plant in Glasgow, with the two facilities now becoming part of ABP’s UK meat division – which also includes an existing Scottish processing facility in Perth. 

ABP said the sale was expected to complete at the end of July, with Scotbeef staff at the two sites due to “seamlessly” transition over to its new owners.

The acquisition – the value of which has not been disclosed – caps off weeks of fevered industry chatter over the future of the two Scotbeef facilities and the wider Scottish beef sector, following the loss of the company’s major own-label Aldi beef supply contract to ABP during the spring. 

But despite growing evidence of a prospective deal between ABP and Scotbeef, followed by rumours that protracted talks broke down on at least one occasion, both parties have remained tight-lipped until today.

The Aldi supply deal represented about 75% of Scotbeef’s entire beef output, according to industry insiders, with the loss of the contract potentially threatening the long-term prospects of the business, its huge Bridge of Allan site and even beef farming north of the border.

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The fallout from the Aldi contract loss also included reports that 54 roles at its Wolverhampton plant – representing over half its workforce – were under threat in April. However, Scotbeef declined to comment when approached by The Grocer last month on the issue, with a spokeswoman saying it was “not in a position to discuss confidential commercial arrangements”.

Ahead of the deal’s announcement, one senior industry source said many were “worried about even more processing capacity being tied up in Irish hands”. Scotbeef is the last major British-owned beef processor of any significant scale, with the market now dominated by Irish giants ABP and Dawn Meats.

But the abiding concern of producers was over the future of the Bridge of Allan facility itself, which processes 1,800 cattle a week, and “needed to stay open” to ensure Scottish beef was processed in Scotland, said National Beef Association CEO Neil Shand last week.

“The value of that processing capacity to Scotland is far more important than who owns it,” Shand told The Grocer.

Family-owned Scotbeef will retain ownership of the Wolverhampton plant, plus its East Kilbride, Annan and Heysham facilities – which are now understood will predominantly service its own DTC e-commerce operation J W Galloway, independent and foodservice contracts, plus an existing M&S deal. 

Scotbeef posted sales of £426.1m in the year to 27 February 2022, according to accounts posted with Companies House last December. This represented an increase of 1.9% on the previous accounting period, driven by inflationary livestock prices. Operating profit fell by 50.5% to £3.4m, however, with the business citing a “competitive pricing environment”.

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Commenting on the announcement, ABP group CEO Frank Stephenson said the Irish meat giant was “looking forward to working with the team in Scotbeef to ensure a smooth and seamless transition for farmer suppliers, colleagues and customers at the Queenslie and Bridge of Allan plants”.

And despite the change in ownership, he stressed “it will be very much business as usual with a commitment to building on Scotbeef’s well established tradition and reputation for high quality Scottish red meat products”.

The sale of the two plants was described as “the right move for our staff and producer suppliers, and also for Scottish agriculture as it secures the ongoing viability of these slaughtering and packing facilities in Scotland”, said Scotbeef CEO Robbie Galloway.

“Like Scotbeef, ABP is a family run business and we have been working closely with them to ensure a smooth transition. We are appreciative of the support and help we have received from [ABP owners] the Goodman family and their ABP colleagues, as we have gone through this process. We wish them well for the future with this acquisition.”

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