Bolton-based Stateside Foods has won a major contract to supply own-label chilled pizza to Morrisons - but the move has resulted in its previous supplier, Paramount Foods, entering administration.
The Grocer has learned that Paramount could no longer provide Morrisons with a “reliable and competitive offer” after it was spun off to its management by meat processing giant Vion in September.
Questions had been raised over Paramount’s operating model, which saw pizza bases made in Salford and then transported to Deeside in Wales, where the toppings were added.
“We took the decision to move the business to an existing supplier that could offer improved quality and value,” said a spokesman for Morrisons.
Operations were suspended at both of Paramount’s sites last week. However, as The Grocer went to press, administrators Duff & Phelps said the company had resumed trading while they continued to look for a full or partial buyer following urgent talks with customers, suppliers and potential purchasers.
Despite this, 118 of the manufacturer’s 450 staff have been made redundant, with 76 job losses at the Deeside site and a further 42 at the Salford factory.
Duff & Phelps said the business had been able to continue trading thanks to “the positive support shown by the company’s key customers”. Paramount currently supplies both chilled and frozen pizzas to Morrisons rivals Sainsbury’s, Asda and Tesco.