Moy Park feeling labor pinch ahead of Brexit

Moy Park, the European subsidiary of Pilgrim’s Pride, is feeling the effects of Brexit before it has even occurred, with a pinch on the labor situation in the United Kingdom.

Roy Graber Headshot
(Photo courtesy of Moy Park)
(Photo courtesy of Moy Park)

Moy Park, the European subsidiary of Pilgrim’s Pride, is feeling the effects of Brexit before it has even occurred, with a pinch on the labor situation in the United Kingdom.

During Pilgrim’s Pride’s quarterly earnings call on May 3, the company’s CEO, Jayson Penn, and chief financial officer, Fabio Sandri, addressed a question from one analyst on how the U.K. leaving the European Union would impact the company.

Sandri said its biggest impact on operations has been related to labor.

“I think we are seeing the labor situation in the U.K. getting tighter as some immigrants are moving out of the country,” said Sandri. “So we’re suffering the effects of Brexit despite (the fact that Brexit has not occurred yet.”

Brexit not expected to affect margins

While Moy Park is facing challenges in terms of the workforce, Penn, believes that Brexit will not have a meaningful impact on margins.

“Our expectation is that in the margin effect is going to remain mostly neutral. And just as a reminder, 93 percent of our U.K. production remains in the U.K. So, since 2016 our team has been continuously planning to be working pretty closely with our key customers and building in logistics and redundancies,” said Penn. “We've got strategic positioning of finished goods labeling closing stock, just about everything that you can think of. So, I'll tell you, the team has done a great job so far and they are fully prepared for either October decision or decision beyond that.”

Pilgrim’s Pride acquired Moy Park from JBS in September 2017, for a price of $1.3 billion.

Also during the earnings call, Penn and Sandri discussed PIlgrim's Pride’s financial results for the first quarter of fiscal year 2019. Penn also offered insights on how the global African swine fever (ASF) outbreak could impact both the company and the poultry industry.

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