GERMANY

Vion reviews German business portfolio

In line with trends seen across the entire meat industry, Vion Food Group, a leading international producer of meat and plant-based alternatives, is adjusting its strategy in its main markets.

Posted on Jan 17 ,00:10

Focus on future-proof performance and sustainability

Vion is reviewing its operations in Germany and has developed a comprehensive set of measures tailored specifically for this market to be implemented 2024. This involves downsizing through divestments and closures.

As part of this plan, Vion intends to sell the cattle slaughterhouse in Altenburg and Ahlener Fleischhandel ham facility to Tönnies Group. The pig processing plant in Perleberg is set to be sold to Uhlen GmbH. The corresponding agreements have been signed. The transactions are subject to customary regulatory approvals and certain closing conditions and are expected to be finalized in the first quarter of 2024. Vion has negotiated a transfer agreement for approximately 700 employees from the mentioned locations with the respective purchasing sides.

In line with the planned reduction in business operations in Germany, Vion made substantial efforts to identify a prospective buyer also for the Emstek pig facility, aiming to preserve the site. Regrettably, no acceptable offers were received during this endeavor. Therefore, Vion aims to close this location presumably by the end of January 2024. The intended closure will impact approximately 840 employees. Vion is committed to supporting these employees in transitioning to new opportunities and to exploring potential employment alternatives. Vion will also negotiate a reconciliation of interests and a social plan with the works council for the affected employees.

Vion’s commitment to people and sustainable growth

"The decisions in Germany impact our employees, customers, suppliers, and partners as we all strive for sustainable development balancing economic progress with environmental responsibility and social well-being. With this being a priority, we have carefully considered changes to make our operations more efficient and flexible. We remain committed to building sustainable supply chains that connect farmers, customers, and partners", outlines Ronald Lotgerink, CEO of Vion Food Group.

Challenges and strategic shifts in the European meat industry

European meat companies, especially in Germany, are facing severe competition from the USA, South America, and China on the global market. The outbreak of African Pagina 2 van 2

Swine Fever (ASF) has not only led to the loss of significant export opportunities but has also intensified pressure on German meat companies. In response, the industry is focusing more on the domestic market, moving towards self-sufficiency. These changes, together with political and regulatory challenges in the agricultural sector, inflation and other factors, resulted in declining herd sizes and high animal prices.

Consequently, the pork sector, in particular, is currently undergoing a strategic restructuring to address overcapacities and manage livestock densities - nationwide, but especially in northern Germany. This restructuring occurs within a sales environment marked by a strong emphasis on affordable prices, even as the industry aims to adopt more sustainable practices, necessitating a shift towards higher pricing. The beef sector faces a similar situation, experiencing an annual decline in production. All these developments have led to the adjustment of our strategy in our primary markets and the current set of measures in Germany.

Comments

Similar articles