A major fruit and juice business which supplies Marks & Spencer, Morrisons and Pret A Manger is to close its Gateshead factory, putting up to 430 jobs at risk.

Orchard House Foods said it plans to relocate production to its existing base in Corby, Northamptonshire. The move comes just 18 months after the firm was bought for £25million by a private equity firm.

Orchard House, which makes prepared and packaged fruit, fruit drinks, fruit jellies, fresh fruit yogurts, compotes and granolas, said the move is part of plans to consolidate production at Corby by the end of November this year.

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The company said it has “started a consultation process with affected colleagues, with up to 430 jobs at risk of redundancy”.

It added that a significant number of jobs will be created in the East Midlands, with support for colleagues from Gateshead who wish to relocate.

Orchard House bosses said they had invested to turn around the site’s performance but that it is “continuing to make losses that make it commercially unviable”.

The closure comes amid surges in the costs of food, energy, labour and transport as food manufacturers come under severe pressure from staff shortages, exacerbated by the UK’s exit from the European Union.

Chief executive Steve Corby said: “We understand that this is an incredibly difficult situation for our employees, and our priority now is to ensure that we do everything we can to support them.

“Despite making significant investments in our Gateshead facility over a considerable period in an effort to turn around its financial performance, it is unfortunately still making losses that make it unsustainable over the long term.

“This is not a decision we have taken lightly and comes off the back of an incredibly challenging period for the sector.

“Like many other businesses across the UK, we have been suffering from a series of economic and business challenges. They include rising energy, raw material, transport and labour costs.

“There has also been a shortage of available staff to work at our Gateshead site.”

 

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