Nestlé job cuts could be ‘tip of Brexit iceberg’
City MP calls on Prime Minister to intervene
FOOD GIANT Nestlé’s plan to cut 181 Yorkshire jobs was last night at the centre of a General Election row over Britain’s future outside the European Union.
Brexit opponents seized on Nestlé’s decision to move production of its Blue Riband biscuit to Poland as evidence of the economic impact of Theresa May’s plan to take the UK out of the European single market.
Nestlé confirmed it was consulting on the future of 153 roles in York and 28 in Halifax as part of 298 proposed job losses nationally.
The company insisted the move was needed to keep its UK sites “competitive in a rapidly changing external environment” and said it was confident the job losses could be achieved through voluntary redundancy.
York Central MP Rachael Maskell promised to fight the job cuts and confirmed she had written to the Prime Minister asking her to intervene.
She said: “Over 2,000 job cuts have been announced in York over the past six months.
“This government has created an economy which works for nobody. I will be fighting for every job loss to be reversed.”
Former Liberal Democrat Business Secretary Sir Vince Cable, who grew up in York, insisted the Nestlé announcement was a taste of things to come.
Sir Vince, who lost his Commons seat in 2015 and is seeking a return at the coming election, said: “Blame for this lies firmly with the Conservative Brexit government for threatening to yank Britain out of the single market and customs union, and I fear there will be many more such announcements.”
The GMB and Unite trade unions criticised Nestlé for announcing job losses just days after reporting rising sales.
Pointing to recent decisions by Diageo and PepsiCo to cut staff, the unions warned the string of job loss announcements could be the “tip of the Brexit iceberg” as companies use the decision to leave the EU as an “excuse to slash jobs”.
GMB general secretary Tim Roache said: “To shift the production of an iconic British brand like Blue Riband to Poland is completely unacceptable. These factories should be exporting chocolate – not people’s jobs.”
But industry experts suggested Nestlé’s decision reflected broader trends in the food sector.
Mark Jones, a food and drink solicitor at the Yorkshire-based Gordons law firm, said: “Mondelez is already producing some of its chocolate products in Poland, including Dairy Milk bars, and the failed takeover of Unilever by Kraft-Heinz reflects packaged foods businesses’ acknowledgment that costs need to be reduced if they are to preserve profitability in the coming years.
“Consumers are moving away from packaged foods in search of healthier choices and shifting production from the UK to Poland should reduce Nestle’s costs in the long run so it can maintain its profitability.
“Nestle and Mondelez’s moves are a sign of things to come, expect more businesses to follow suit.”
Nestle and Mondelez’s moves are a sign of things to come. Mark Jones, food and drink solicitor at Gordons law firm
FROM EXPORTING chocolate to exporting employment, the news that more than 150 jobs are to be lost in York and Halifax as production of Nestlé’s Blue Riband chocolate bar is moved to Poland leaves a bitter taste in the mouth.
The company insists the announcement has nothing to do with the Brexit process and the changes would have been necessary irrespective of the country’s decision in last year’s referendum. Instead it blames changing consumer habits and the need to “operate more efficiently”.
However, unions fear the move may be “the tip of the Brexit iceberg”. The unfortunate truth is companies moving jobs abroad to take advantage of cheaper labour is a trend that started long before the term Brexit was invented and is a problem that is not easily solved.
In 2011, Cadbury shut a factory near Bristol to move production to Poland at a cost of 400 jobs in the UK. And in May last year, HSBC announced it was cutting 600 IT jobs in Sheffield and Leeds and transferring the roles to India, China and Poland. To add insult to injury, workers being made redundant were told to train up their replacements.
This trend can hardly be blamed on Brexit and the repeated loss of such jobs overseas is actually likely to have been a motivating factor for many Leave voters.
But there are growing warning signs that the process of leaving the EU may actually exacerbate rather than solve the problem of companies moving jobs abroad. Last week, Burberry announced its building of a new facility employing 1,000 people in Leeds remains on hold as it waits to see how export tariffs will work once the UK leaves the single market – raising fears the firm and others like it may soon prefer a base inside the EU.
Politicians have been promising that Brexit is the path to a brighter national future. But turning sweet words into reality will not be easy.