Dutch meat giant Vion has warned that the UK outlook remains challenging, but stressed that restructuring UK operations will lead to greater efficiency.

Vion reported yearly net profits down 57% to €54m for global operations, blaming purchasing costs and excess supply. Turnover rose 21% to €8.6bn.

UK sales of premium beef had fallen while cheaper mince sales continued to grow against a backdrop of rising cattle prices, said Vion. Lower-than-forecast seasonal availability of lamb also led to high prices, which together with promotions put pressure on margins. Vion said it was now using more over 30-month cattle and temporarily importing lambs in order to better align supply with demand. In the UK the Grampian name will be dropped as British operations are united under the Vion Food UK banner, while the company has restructured several sites.