Confectioner's demise blamed on supermarket squeeze

Related tags Confectionery Candy

Scottish confectioner John Millar and Sons has gone into
receivership and blamed aggressive pricing from supermarkets for
contributing to its demise, Tom Armitage reports.

A spokesperson for Pricewaterhouse Coopers (PwC​), the receivers acting on the firm's behalf, said that although the Broxburn-based company had implemented a restructuring strategy and it was beginning to break even, it had not yet "borne fruit"​.

PwC's Graham Martin said, however, that there had already been some interest in the firm and that he was hopeful of securing a new owner for the plant and a future for its workforce of around 100.

Millar manufactures a number of confectionery products, including mints, caramels and boiled sweets, although its Pan Drops brand (a peppermint flavoured boiled sweet) is said to be its most valuable asset.

Martin said that the company's margins had been adversely affected by high raw material costs, heightened competition from imports and the "double edged"​ nature of supermarket pricing.

Although the company had secured distribution deals with a number of major Scottish retailers, for instance Woolworths, Martin said that the company had found it increasingly difficult to make money from these alone and had failed to extend its reach beyond the Scottish boarder - despite the popularity of its confectionery in Scotland.

Traditionally, supermarkets have used confectionery as a means of driving store traffic and the implementation of aggressive pricing strategies (countline discounting, for instance) has enabled consumers to gain access to luxury - albeit mass-produced - confectionery, at the expense of smaller, more traditional manufacturers.

Last month, Stenhousemuir-based Highland Toffee, manufacturers of the Lanky Larry Sour Lemon and Lippy Chick confectionery brands, was saved from receivership after a last minute buyout.

British confectionery distributors of all sizes, including Nestlé, Cadbury and Kraft, have all faced tough trading conditions in recent months - sales volumes have been adversely affected by an EU-wide drive to tackle obesity, while high raw material costs (particularly sugar) have squeezed margins.

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