Restructuring rumours surface at Mars
in the world, could soon have its UK production outsourced to
Europe following increasing competition in the domestic
confectionery sector and flagging overall sales of core chocolate
confectionery products, Tom Armitage reports.
According to an unconfirmed report in The Sunday Times, Mars, one of the largest privately owned confectionery companies in the world, is set to review its European operations - a move which could seal the fate of more than 1,700 workers.
Staff at its UK headquarters, based in Slough, Berkshire, were reportedly told in an internal communication that the review would seek to address "sales growth, manufacturing capacity, and overheads and ways of working".
In keeping with its long-standing tradition of privacy, Mars has so far refused to comment, although the outcome of the "pan-European consultation" is expected to be known in approximately six to eight weeks.
If the restructuring rumours are found to be accurate, the company will join a host of other leading international confectionery manufacturers, including Nestlé, Cadbury and Kraft, which have all recently signalled their intentions to downsize their British workforces.
In April last year, for instance, leading global food producer Kraft announced the closure of its York production facility - a move that will see the production of its Terry's Chocolate Orange, Terry's All Gold and Twilight brands transferred to alternative sites across Sweden, Belgium, Poland and Slovakia later in the year.
According to industry analysts Euromonitor International, Mars was western Europe's sixth biggest confectionery brand in 2003, accounting for 1.4 per cent of all retail sales. Conversely, its Snickers and Twix brands ranked just outside the top ten, notching up respective retail sales of 1 and 0.9 per cent.
In the UK, however, its Mars brand enjoys a slightly larger market share - second only to Cadbury's Dairy Milk brand and this, together with its Galaxy and Maltesers brands, account for 8.1 per cent of UK retail sales of branded chocolate confectionery.
Mars' traditional strategy, which last year helped rack up an estimated turnover of £9.6 billion (€13.8 billion), has recently drawn criticism from analysts for its heavy reliance on the chocolate confectionery segment - currently one of the slowest growing confectionery sectors in western Europe.