Kettle Foods warns Brexit could force it to move production to the EU
PUBLISHED: 06:10 18 October 2017 | UPDATED: 13:34 18 October 2017
Archant Norfolk 2017
Kettle Foods UK managing director Ashley Hicks said while the group would continue to fry potato crisps in Norfolk for the UK market, if tariffs made it unviable to distribute from Norwich to Europe he would consider the move.
It comes amid growing fears the country could be hit by World Trade Organisation rates if no deal is reach with the European Union.
Since the referendum Kettle has seen costs of importing sunflower oil increase by more than £1m due to the weakening of the pound and inflation hitting its highest rate since 2012.
Mr Hicks said with a Kettle factory, which produces vegetable crisps, already in the Netherlands the company had a foothold on the mainland.
He said: “Brexit has given us something to think about.
“One strategy we would have to think about would be to produce Kettle Chips in Holland to sell to the European customers.
“I am not sure we would ever do Kettle Chips for the UK market in Holland.
“I can see a scenario where we buy Dutch potatoes locally to the factory to produce chips for the Dutch and German market but continuing to make chips for the UK here.”
Currently the export market makes up about 15% of what is produced in the Bowthorpe factory and Mr Hicks said it was growing 20% a year.
But he added any move of part of the production would was a contingency plan with the UK market still growing.
“In the UK 10% of the snacks market is premium crisps, in Germany that is one to two per cent so there is a lot of room to grow,” Mr Hicks said.
With sunflower oil and film for packaging among the materials Kettle imports the business has been looking at ways to offset the extra costs from currency rates changing.
Mr Hicks said Kettle was aiming to raise its productivity with the same amount of staff, currently 443 people at the Norwich plant, producing more crisps as the UK market continued to grow. He said: “When your market is growing you can invest and look at how to increase productivity with what you have got.
“As long as the volume is still growing we can make those decisions.
“The main area we have been hiring is in the sales team. With the growth in sales if they can keep selling then that means there is more for the guys here to cook.”
Mr Hicks said the growth of discount supermarkets in the grocery sector has also put further pressure on food manufacturers as outlets fight to keep prices down.
He said measures including changing to cheaper cardboard for packaging and agreeing a unified size of box with supermarkets had helped to make significant savings.