Formally known as the Navy, Army and Air Force Institutes, it will remain as a provider of welfare services, army shops and leisure facilities, employing 3,200 people. But the loss of the pounds 400m contract to supply food to the forces will also mean the disappearance of 2,000 jobs. Booker Foodservice Group, part of Booker Plc, a pounds 900m catering and food combine, will keep the forces supplied with their annual 29 million breakfast sausages, 738,000 catering-sized tins of baked beans, 30 million eggs and 260,000kg of streaky bacon. The 648,000 steak-and-kidney pies appeared to be the favourite dinner in the mess, but the combined forces' favourite food on active service is said to be the Pot Noodle.
In a Commons written reply yesterday Nicholas Soames, Minister of State for the Armed Forces, said that from October the five-year contract to supply and distribute food to the forces will go to Booker. The contract covers the purchase, warehousing and distribution of food for the forces in the UK and Germany. It will also meet the needs of ships, exercises and operations world-wide.
Shortly after the announcement, the Naafi chief executive, Geoffrey Dart, said the job losses will be mainly at Amesbury, Wiltshire, Nottingham and Kempen, in Germany. "The armed forces have confirmed their commitment to Naafi as their preferred trading organisation as long as we modernise and return to profit. That has to be our priority if we are to survive, and we will," said Mr Dart, a former executive with Marks & Spencer.
Loss of the contract is a severe blow to Naafi, which, after reorganisation under new management, had recently fought its way back into the black despite two years of big losses.
On 1 January it was announced that the organisation, formed in 1921 to replace the Army Canteen Committee, had made pounds 700,000 in the six months to October compared with a pounds 3m loss last year. But it had been criticised for failing to cope with the services' demands under the old three-year contract. MPs said the decision to privatise food supply and award the first contract to the Naafi in 1994 turned into a "minor debacle". Previously half the food had been supplied by the Naafi and the other half was delivered to units mainly by Royal Navy and Army depots.
After a computer breakdown, Royal Navy, Army and Royal Air Force bases had to contend with late deliveries and wrong orders. Some units had to buy supplies from shops and supermarkets; men at Faslane nuclear submarine base were sent to a McDonald's for breakfast.
Mr Soames said recommendations in a National Audit Office report on how the forces were fed and watered were "fully reflected" in the awarding of the new contract. November's NAO study also showed personnel were served a less than healthy diet. However, Booker has not yet revealed the 1,500 lines armed forces will be receiving. But the company, which is to create 300 new jobs in depots in England, Scotland and Germany, won a 1995 Unilever catering award for its information on food allergies and vegetarianism.
The war on hunger
Formed in 1921 as co-operative business run by the services:
At start of the Second World War was said to have the biggest pantry in the world.
1939: Naafis were sent to war with the troops.
1943: 16-page booklet produced on how to make the perfect brew (tea).
Post-war black marketeers cost taxpayers pounds 20m selling Naafi goods to Germans.
Modern Naafis look more like discos or nightclubs.