Sector News

Nestle, the British Government and the battle of the Blue Riband

July 5, 2017
Consumer Packaged Goods

Nestle’s Blue Riband chocolate wafer is not an obvious metaphor for everything that is wrong with multinational businesses, globalisation, Brexit and the Government’s alleged industrial policy, but it has become one all the same.

A battle over the future of the sweet, launched in 1936 and made in Britain ever since, has been under way for several months, after the company unveiled plans to ship the manufacturing of it to Poland and to cut nearly 300 British jobs, including those of the people that make it.

The GMB union is currently tearing its hair out trying to get any sense out of the company as to the reasons for its decision, and out of the Government over what (if anything) it is proposing to do about it despite all the claims made about its shiny new interventionist industrial policy.

After trying to get some answers from both parties, I can well understand why.

First to the Government. Now you’d think that given the money and guarantees offered to the country’s car makers, its food manufacturers, which employ a lot more people, might expect some similar tlc. But apparently not.

What we know about the Blue Riband situation is this: On June 28, shadow Business, Energy & Industrial Strategy (BEIS) minister Bill Esterson raised the question of when the Government would be meeting with Nestle UK representatives with the aim of stopping the potential job losses. You might expect that to happen given said industrial policy.

The answer from minister Claire Perry came a few days later. She revealed that the Government was aware of the situation and had met with the company as early as April.

However, when I approached her department to find out more, I was told that food manufacturing was not a actually matter for the Department for BEIS. I should instead approach the Department for Environment, Food & Rural Affairs, now run by the member for Murdoch Central Michael Gove. Food manufacturing might be manufacturing and it might also be a business, but Defra leads on it you see.

Needless to say, this is what always seems to happen in these situations: the buck gets passed, you get sent around the houses, just about everyone denies responsibility, no answers are forthcoming. And ministers wonder why people don’t think much of them or their Government.

The union is worried that Brexit has played a role in the affair, and that the lack of anything resembling clarity on what might emerge from the talks with the EU in terms of tariffs and trade, is encouraging companies like Nestle to cut and run rather than investing in the UK.

It says more than 2,000 jobs have been shed by the industry as a whole just this year and thinks this might be the reason.

You’d certainly imagine those numbers would be of some concern to the likes of Mr Gove and his pals as they push their mad project through. But apparently not.

Good manufacturing jobs don’t seem to count for very much these days. It’s all about getting out into the fields to pick strawberries while waving union jacks and being patriotic. At least according to Mr Gove’s fellow Brexiteer Andrea Leadsom.

So to Nestle. Which says this really isn’t about Brexit after all. Well that’s a relief!

After calling its press office, and being told to put my questions down on an e-mail, I received a mealy mouthed official statement, also in an e-mail.

It said that Fawdon in Newcastle, where Blue Ribands are produced, is a jolly complicated plant that produces everything from biscuits and soft wafer-based biscuits to chocolate singles, sharing bags, sugar confectionery and seasonal products. Phew!

The proposal to move Blue Ribands to Kargowa in Poland “one of Nestlé’s global centres of confectionery excellence!” will reduce the number of technologies that Fawdon needs to maintain. That’s me told!

Oh, and only 80 of the 298 job losses announced at the end of April are related to Blue Ribands. What a relief. The cull will, in fact, also affect other sites in the UK. Efficiency is everything!

The company’s e-mail further informed me that nothing more would be forthcoming because discussions about the redundancies (it hopes they’ll be voluntary) are “confidential”. Which makes it all fine and dandy.

Here’s the thing: The wafer might be made by a French multinational, but it is a very British product, the sort of thing people from this country working abroad might go to one of those expat shops to buy alongside big boxes of Tetley Tea, or Oxo or (ugh) Marmite.

The decision to ship it out to Poland and then to export back to its main market could be used as an example of everything that’s wrong about globalisation.

Transporting all that chocolate will put more lorries on the road, and more carbon into the atmosphere. If it even makes a few pounds, or euros, for the company (which made £112m in Britain before tax according to the most recent accounts filed) it probably won’t be enough to round up more than a number or two that would otherwise have been rounded down on a corporate spread sheet.

The union reckons that the jobs could be saved with the investment of £1.2m.

Whether that tiny investment is not being made because of the Government’s stupidity over Brexit, or whether it is because the grey men and women that run Nestle want to round up a number on a spreadsheet, or whether it’s because multinationals do stupid things and British Governments stupidly fail to react to them, I’m still none the wiser.

I do know that this is the sort of thing that makes people very, very cross and that it helps to explain why people in western democracies are increasingly, and dangerously, moving towards political extremes. Given the run around I’ve had investigating it, I’m now very cross and I’m not even one of the poor workers whose jobs are under threat.

By James Moore

Source: The Independent

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