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Chewits production to move to Eastern Europe

By Peter Stiff , 23-Jan-2006

Further job cuts in the UK confectionery market are likely, as Leaf signals it will move production of Chewits to Eastern Europe from Merseyside.

Leaf UK, a subsidiary of Leaf International, announced last week it is considering ceasing production of Chewits at its factory in Southport.

Production of the popular chewy sweets at the current location, known as Holland's Toffee Factory, is unviable as the facility is outdated and is running at 40 per cent.

The factory has manufactured the sweets for 40 years and should it close, 128 jobs will be lost.

The company has indicated that Eastern Europe will be the location for a new facility as Leaf, like others before it, goes in search of lower manufacturing costs.

The Transport and General Workers Union (TGWU) is protesting the move.

The TGWU claims the proposed move is a measure to reduce costs and has not ruled out a campaign of action to save the jobs.

"This isn't about a strategy in the chewy sweets market in our view," said Franny Joyce a spokesperson for the TGWU.

A meeting between Leaf and the staff at the Southport factory is to take place on 30 January.

About five million Chewits are sold every day, predominately in the UK.

Other markets for the childhood-favourite chewy fruit sweets include Ireland, Sweden, Poland, Russia, the Baltic States, Australia, New Zealand, the Middle East and Canada.

The original sweets, launched in 1965, were available in strawberry, blackcurrant, orange and banana flavours.

Leaf International is based in Holland and was bought by a venture capital company in February 2005.

The business, which has six main operating companies and 15 manufacturing plants across Europe, had a turnover of €745 million in 2004.

Many Confectionery companies have already established themselves in Eastern Europe.

Last year Kraft closed the Terry's chocolate factory in York to switch production of brands such as Terry's Chocolate Orange to Poland where it sought lower overheads at the expense of over 300 jobs.

Masterfoods' cut 500 jobs in 2005 when it closed its Slough factory relocating production of the Twix and Starburst brands, partly to the Czech Republic.

Last year Cadbury Schweppes also made the decision to build a manufacturing facility in Poland and Kraft switched production from Norway to Lithuania.

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