300 jobs go as Bulmer pulls out of soft drinks: Cider to become the main focus in pounds 7.8m restructuring

John Shepherd
Thursday 19 May 1994 23:02

A QUARTER of HP Bulmer's 1,200 staff in the UK are being made redundant as the company, known for its Strongbow and Woodpecker ciders, pulls out of the soft drinks business.

John Rudgard, chief executive, said 300 jobs would be shed across the board. 'We will de-layer the management team,' he said.

Bulmer will seek buyers for its two main soft drinks brands, Kiri apple juice and Cidona, another apple-based drink.

The rest of the soft drinks business is contract-based, involving production under licence of Volvic mineral water for BSN and Orangina for Pernod Ricard.

Bulmer refused to disclose whether the high-volume low- margin soft drinks business was profitable, but it has been hurt by poor summer weather for the past two years. Last year, Bulmer lost the contract to bottle Perrier when it was taken over by Nestle.

The jobs will be phased out over 18 months. Bulmer will take a pounds 7.8m restructuring charge into its results for 1993/94 which ended last month. Projected annual cost savings from the cuts are pounds 6.5m.

'The cider business is doing well despite two of our main competitors having issued profit warnings,' Mr Rudgard said.

'But before we hit the buffers and run into problems, now is the time to get into shape. We see this as the main refocus of our business. We want to be reactive and responsive to change.'

Bulmer is confident of meeting analysts' forecasts of a 10 per cent rise in profits before tax to pounds 21m for 1993/94. Shares yesterday rose 8p to 397p on the news.

British soft drinks producers are facing competition from abroad, particularly Spain which benefits from a cheaper labour force and cheap citrus fruit.

Bulmer has given up its wines and spirits businesses and stopped making pectin, the food gel made from apples.

The closure means that Bulmer will close its original 100-year-old, four-acre site in Hereford.

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