Business Secretary Jonathan Reynolds hit out at conglomerate Associated British Foods as it launches closure plans while talks continue
An industry giant part owned by one of Britain’s richest families yesterday ratcheted-up pressure on the government for taxpayers’ money to save one of its factories.
Associated British Foods, better known for owning high street fashion chain Primark, kicked off a consultation to close its Vivergo Fuels plant near Hull, with the loss of 160 jobs. The site makes bioethanol, which is used in petrol. ABF says the plant is losing £3million a month and blamed the government for failing to tackle an influx of cheap bioethanol from abroad, which to set to worsen under Labour’s trade deal with US President Donald Trump.
But the move to an “orderly wind-down” drew criticism from Business Secretary Jonathan Reynolds, given negotiations are ongoing. Speaking to reporters at the British Chambers of Commerce annual conference in London, he said: “We are willing to engage with them and potentially put government money into a restructure. I regret Vivergo’s decision to start consultations as to let the workforce go and close the plant. It is premature because we are in good faith in those negotiations.”
The plea for government money comes despite ABF having a stock market value of £14.6billion, and making more than £1.9bn profit last year.
The Weston family was ranked sixth in this year’s Sunday Times Rich List, worth £17.7bn. They own a just under 21% stake in conglomerate ABF’s majority shareholder. George Weston is chief executive of ABF.
Chancellor Rachel Reeves said last week “the answer can’t always be yes” when industries request support. But it comes days after the government revealed its flagship Industrial Strategy to boost investment in the UK.
Insiders said the timing of the consultation was that ABF wanted to conclude the process, if needed, by the end of its financial year.
Bioethanol is a “green” alternative used in fuels such as petrol and diesel. It is a plant-based material that is produced by fermenting and distilling crops such as wheat and corn. The Vivergo plant began operating in late 2012.
The future of Britain’s other major bioethanol producer, German-owned Ensus in North Yorkshire, is also unclear.
In a statement, ABF later added: “ABF cannot continue to absorb losses at the plant. That is why a timely solution is vital. Our clear preference is to find that solution through this process and to get back to running a business that can thrive in the long term.”