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Trafford Park Bakery closure exposes the myth of corporate social responsibilityThe closure of the site, which is due to be completed in December 2006, follows the squeezing of suppliers by the giant supermarkets as they jostle for market share and higher profits. The Trafford Park Bakery, which is dedicated solely to supplying Tesco, has become financially unviable at the wholesale prices which Tesco was willing to pay. Northern Foods, which produces a wide range of processed food products both under its own brands and under the supermarkets’ ‘own labels’, employs 20,000 workers in
Northern Foods is also cutting 210 jobs at its Palethorpes plant in
A statement issued by Northern Foods plc claimed that it was ‘proposing’ to close its Trafford Park Bakery in
“The decision reflects Northern Foods’ focus on improving the overall performance of the business and is being progressed at this time in preparation for the disposal of the Pastry category…
“The closure supports the proposed sale of the Pastry Products business and is consistent with the strategy, announced on 31 May 2006, to focus on businesses where Northern Foods has a competitive advantage.”
The closure will have a devastating effect on an area which already has very serious economic and social problems.
The structure of the processed food manufacturing industry in
“GMB is surprised and shocked by this announcement. This is another example of Tesco throwing their buying power weight about by depressing prices and moving production at will to other plants. Tesco should talk to Northern Foods about finding a viable future for this plant which employs 690 local workers.
“There is such a thing was corporate social responsibility and Tesco need to start practising this. GMB will be asking the OFT [Office of Fair Trading] which is currently looking at the power of the supermarkets to examine this specific case as an abuse of power. Tesco and Northern Foods owe to these loyal workers to pause and look for another way forward."
Tesco has denied responsibility for the job losses. The BBC quoted a Tesco spokesperson:
"Over time we have been as supportive as we can be to improve the performance of the site… We continue to work closely with Northern Foods who still supply us with a significant number of other products across other areas of our business. We are working with our supply base to ensure availability of sausage rolls, pies and quiches for our customers."
Tesco declared a yearly profit of £2.2 billion in April 2006.
The comments by GMB trade union official Jude Brimble suggest two avenues through which the
No action by government
“As supermarkets' profits have grown, the fortunes of their suppliers have dwindled. The power the chains have over food makers such as Northern was exposed in the Competition Commission's last investigation of the industry in 2003 when Safeway was on the block. Evidence given by suppliers claimed that supermarkets simply ignored the industry code of practice imposed after the investigation in 2000, continuing their ‘predatory practices’. Suppliers told the commission that supermarkets gave them chapter and verse on how to run their business, controlling every last detail down to which logistics groups to use to make their deliveries.”
Despite this evidence, the government has taken no action. In 2005, it was the owners of Northern Foods plc who benefited when Asda, Tesco’s nearest competitor, started ordering ‘ready meals’ from Northern Foods instead of Asda’s previous supplier,
Appeals to the ‘social responsibility’ of the corporations have even less likelihood of saving the jobs of workers in the industry. The companies already have so-called ‘social responsibility’ policies; the Northern Foods statement includes the following:
“Competing in the fast paced, low cost environment that characterises today’s food industry places great demands on the business. Such demands appear all the more challenging given that a number of our factories are located in areas of high social deprivation, where standards of education, literacy and numeracy can vary and reliance on temporary and migrant workers is often very high, particularly through periods of high seasonal demand.
“In this context, we believe that a good place to work is a safe place to work, characterised by open, two way communication, by recognition of people’s efforts, and by offering everyone the opportunity to develop their skills…we will help our employees perform to the best of their abilities and drive a culture of continuous improvement at our sites.
“Our progress for the year and our targets for 2006/07 are detailed. We believe that they will provide a valuable focus point for people seeking to maximise their potential in the business.”
Fine words. Tesco’s policy is more succinct:
“One of our most important values is to treat people how we would like to be treated. We try to achieve this by being a good employer and by playing our part in local communities. People tell us that they want use to use our size and success to be a force for good. We accept this challenge with enthusiasm and commitment.”
In the context of private ownership and the capitalist market, the only social responsibility recognised by the corporations is to maximise the profits of their owners - whatever the human cost.