Nestlé to sell six confectionery brands in New Zealand

By Jenny Eagle contact

- Last updated on GMT

Nestlé Heards are one of the brands that will be sold. Photo: Periscope Design New Zealand.
Nestlé Heards are one of the brands that will be sold. Photo: Periscope Design New Zealand.
Nestlé New Zealand has reached a conditional agreement to sell six confectionery brands to Quadrant Private Equity to focus on its chocolate, baking and medicated lozengers.

The brands include; Mackintosh’s, Heards, Black Knight and Fabulicious Red Licorice, Life Savers and Oddfellows, axing approximately 55 jobs from a workforce of more than 270. 

Maggi soups

It (the sale) has been based on a careful consideration of how to focus our activities and resources, recognising that our sugar confectionery range in New Zealand is largely made up of smaller local brands​,” said Martin Brown GM, Nestlé Confectionery. 

The company will now enter a consultation period with employees at its Wiri factory, in Auckland, over voluntary redundancies. It now plans to focus on culinary products at its Wiri factory, including Maggi soups, recipe mixes and food service products. 

Quadrant Private Equity already owns RJ’s and Darrell Lea confectionery brands and manufacturing will move from Wiri to RJ's factory in Levin. 

Speaking of the job cuts, Phil Knight, industry coordinator, food sector, E tū trade union, said the announcement came as a “bolt from the blue”.

The union has about 200 members at the plant, and he said the restructure will see production of Nestlé Scorched Almonds move to a third-party contractor in Melbourne, while production of the iconic Lollipops brand will move to China.

We were aware of the sell-off of product lines and cuts to staff overseas, so we asked the company specifically if there were any such plans for New Zealand​,” said Knight.

We were assured there were none, so this has come as a bolt from the blue.

Job losses

While the union-negotiated collective agreement has very generous redundancy provisions, it is not the same as a job, and we are worried about this coming on top of other job losses in the food manufacturing industry in New Zealand​.”

Knight added the decision comes after Cadbury owner Mondelez announced earlier last year​ it would stop manufacturing Cadbury products in Dunedin in March 2018, axing 350 jobs. The decision was part of a $4.2bn cost-cutting strategy that reportedly began in 2014.

He said there are also announcements of future job losses at Griffins and Kraft Heinz Watties.

Amy Law, national sales manager, RJ's, said the company is working with Nestlé over the next few weeks to "identify what requirements will be needed at our plant in Levin".

"If this agreement goes ahead we will be increasing our manufacturing requirement and are very keen to talk to any of the Nestle team who are keen to transfer​."

Manufacturing of the lollies at the Levin factory will start before the end of the year.

Related topics: Markets, Chocolate, Candy, Nestlé

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