Job losses, pension fund scrutiny at Bernard Matthews

The UK’s renowned turkey producer, Bernard Matthews, has announced that 128 jobs will be lost as the result of restructuring decisions, and certain aspects of the firm’s acquisition by Boparan Private Office (BPO) last year have been investigated by a parliamentary committee.

Photo courtesy of Iowa Turkey Federation
Photo courtesy of Iowa Turkey Federation

The UK’s renowned turkey producer, Bernard Matthews, has announced that 128 jobs will be lost as the result of restructuring decisions, and certain aspects of the firm’s acquisition by Boparan Private Office (BPO) last year have been investigated by a parliamentary committee.

Chicken production, managerial job losses

A total of 128 jobs will be cut at Bernard Matthews’ south site at Great Witchingham in Norfolk, comprising 69 posts in chicken production, and 59 managerial positions, reports Eastern Daily Press. Turkey meat production at the north site is unaffected. Before negotiations began, it appeared that 155 jobs were at risk.

According to Unite, the country’s largest union that represents 550 of the firm’s 1,400 employees, the workers “feel betrayed and let down.” When the company was acquired by BPO last year, they believed that more business would be generated in chicken production. BPO is a private investment company, headed by Ranjit Singh Boparan, who is founder, owner and CEO of 2 Sisters Food Group, which is also owned by BPO.

“We have completed the process and explored all options available to us to mitigate job losses,” said a Bernard Matthews spokesman. “After discussion with colleagues and union representatives, the decision was taken to cease production of chicken and to restructure head office. These changes will enable the business to focus on what we’re best at, and allow us to make things happen with agility and pace.”

BPO acquisition of Bernard Matthews subjected to scrutiny

Following the announcement in September 2016 that Ranjit Singh Boparan was to acquire Bernard Matthews from Rutland Partners, through BPO, there was an investigation by the Competition and Markets Authority (CMA). In February 2017, that investigation cleared the acquisition.

However, the case has raised concerns about the type of acquisition made by BPO of Bernard Matthews. It is alleged that the “pre-pack” administration process is a means of shedding responsibility for pension liabilities, and transferring them to the Pension Protection Fund (PPF), a statutory fund in the UK to protect people whose pension fund has become insolvent.

Last week, the parliamentary Work and Pensions Committee published evidence that Bernard Matthews’ former owners, Rutland Partners, had rejected a buy-out offer that would have protected the pension scheme for the firm’s retired employees. Instead, Rutland opted for a “pre-pack” administration process, overseen by Deloitte. This had the consequence that the Bernard Matthews’ pension scheme, with an estimate deficit of GBP75 million, would pay far less in retirement income to its members.

“I have confidence that the PPF, working with the scheme trustees, will act in the best interests of the pensioners, but it’s clear that the former owners passed up a better deal for pension scheme members in favor of lining their own pockets,” said Chair of the Committee, Rt. Hon. Frank Field, M.P.

In September, BPO explained its position over the acquisition of Bernard Matthews.

“We would welcome any review of this transaction,” said a BPO spokesperson. “Boparan offered the seller a deal which would have included all assets and liabilities, including the pension liability. Unfortunately, this offer was rejected. Consequently, we have secured a deal that saved 2,000 jobs and has saved the Christmas 2016 turkey supply, which was at serious risk without our intervention.

“Whilst we recognize all liabilities including the pension liability is the seller’s responsibility, it should be recognized that we have paid a fair market price for the assets, which is materially more than the pension deficit.”

Already in October 2016, it was reported that the acquisition by BPO would lead to former suppliers to the Bernard Matthews turkey business, who were owed money before it was sold, not being paid.

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