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November 23, 2018

UK watchdog probes sale of 2 Sisters’ Manton Wood unit to Samworth Brothers

The UK's competition watchdog is inviting feedback from any concerned parties over the planned sale of a sandwich business in the country.

By Simon Harvey

The UK’s competition watchdog is inviting feedback from any concerned parties over the planned sale of 2 Sisters Food Group’s Nottingham-based sandwich business to Samworth Brothers.

2 Sisters announced earlier this month it would offload its Manton Wood plant to Samworth, the Leicester-based manufacturer of Ginsters pasties and Melton Mowbray pork pies, for an undisclosed sum. Manton Wood makes chilled sandwiches, wraps and rolls. 

But today (23 November), the Competition and Markets Authority said it has launched an initial phase-one investigation into the deal. That generally means the CMA is seeking to ascertain whether there are any conflicts over competition or valid causes for concern among interest parties.

Invitations to comment on the deal will run until 7 December, with the deadline for the phase-one investigation set for 23 January, the CMA said.

Chicken processor 2 Sisters is owned by millionaire Ranjit Singh Boparan, whose business empire stretches across a myriad of food enterprises and foodservice outlets held by parent company Boparan Holdings and his private-investment vehicle Boparan Ventures.

A number of businesses also come under 2 Sisters’ wings, some of which newly-installed chief executive Ronald Kers is seeking to offload in an effort to streamline operations and return the company to profit.

This week 2 Sisters reported losses widened to GBP53.8m (US$69.1m) in the fourth quarter, from GBP17.6m a year earlier. Operating profits plunged 58% to GBP4.9m.

On the top line, while sales climbed 1.5% on a like-for-like basis to GBP694m, total sales were down by the same percentage margin to GBP803.7m.

CEO Kers, who was joined by a new chief finance officer in July, Craig Tomkinson, said of the performance: “Our Q4 results reflect the difficult macro-economic backdrop and the challenges we have faced in our own business. Against this backdrop we have a clear strategic plan, which we are executing at pace to improve business performance. 

“We remain focused on addressing our core UK and European poultry operations and providing the right environment for our chilled and branded businesses to flourish. By focusing on our core with a new team, we are laying strong foundations for a more consistently performing and profitable future. I expect to see the margin improvements associated with the turnaround programme from our third quarter onwards.” 

The largest sandwich manufacturer operating in the UK is Ireland-based Greencore.

Read just-food’s two-part interview with Greencore CEO Patrick Coveney, published last week

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