The move is part of a £29.4m investment at its factories in York and Halifax intended to support the company’s long-term success in an increasingly competitive category.
The proposed changes would create a more efficient manufacturing footprint and, in turn, allow greater strategic investment in Nestlé’s biggest confectionery brands, the company said in a statement.
The company’s site in Fawdon, near Newcastle, produces Fruit Pastilles and will close at the end of 2023, costing 475 jobs. Changes to working practices at the York facility, which produces KitKats, Aero and Yorkie bars, will result in 98 losses.
Nestlé said it has chosen to announce the proposals as early as possible to provide the maximum time for consultation with its colleagues and trade union representatives.
But the plans have already been criticised by the main union bosses. Ross Murdoch, GMB National Officer, said: “To ruin hundreds of lives in a ruthless pursuit of profits, to the very workers who’ve kept the company going during a global pandemic, is sickening. Nestlé is the largest food producer in the world, with astronomical profits. It can afford to treat workers right.
“Instead, they’ve allowed factories to deteriorate, outsourced production overseas and now slashed 600 jobs. It’s corporate greed at its worst – GMB and Unite will fight for every job.”
The proposals shared by Nestlé with its employees state:
• Production at Fawdon would move to other, existing factories in the UK and Europe and Fawdon factory would close towards the end of 2023.
• It would make a £20.2m investment at its York factory to modernise and increase production of KitKat in the city where the brand was first created in 1935.
• It would make a further £9.2m investment at Halifax to build on its existing expertise and equip the factory to take on the largest portion of Fawdon’s current production.
“Our Fawdon factory is home to many smaller, low-growth brands and maintains a diverse and complex mix of production techniques. In contrast, our factories at York and Halifax have clearer specialisms and manufacture some of Nestlé’s biggest brands,” the company said in a statement.
Joe Clarke, Unite National Officer for the Food and Drink Industry, said: “The news about Nestlé’s plans for its respective sites in Newcastle and York is a cruel body blow to the dedicated workforces, their families and, more widely, the regional economies.
“We will be asking for an urgent meeting with the management to ascertain the business rationale for these decisions from a multi-national company which is highly profitable.
“The fact these announcements have come during a global pandemic is particularly bitter and heartless.
“Unite will be liaising closely with the GMB union to strongly campaign against these misguided plans whose only motive seems to be increasing profits.
“We will also be giving maximum support to our members and their families in the coming weeks and months.”
Nestlé said: “We do not underestimate the impact that the closure of Fawdon factory would have on the local area and, as part of the consultation, we want to work with the local community to find ways that we can support the area and our employees if these proposals were to go ahead.
“The City of York is the proud home of our confectionery business where Nestlé has invested more than half-a-billion pounds over the last three decades. The site’s main office building, Nestlé House, is currently undergoing a £9m refurbishment.”
York is also the base for Nestlé Confectionery’s global R&D centre which develops products for markets all over the world. A new manufacturing line was added to the centre in 2020 as part of a £4m investment.
Nestlé’s Halifax factory has operated at the same site for more than a century and, under the new proposals, would become even more important to its operation with an overall increase in production volumes.
“We believe that the business case behind these proposed changes is compelling and, ultimately, the best way to keep our business competitive in the long term,” the company said.
“Nevertheless, we very much regret the uncertainty this announcement will cause our people and their families and we want to make sure they are supported throughout this process. There is now the time and the space for all parties to engage in a constructive consultation around today’s proposals and we welcome those discussions.”
The company said it will make sure those affected are properly supported throughout the consultation process.