Brexit claimed its first corporate victim yesterday as the maker of Pink Panther wafer biscuits plunged into administration after a sharp rise in costs following the fall in the pound.
Rivington Biscuits made 99 of its 123 staff redundant yesterday. The remaining staff will stay on to keep the business running and to fulfil Christmas and new year orders while the administrator FRP Advisory tries to sell the business as a going concern.
The company is based in Wigan but is owned by Van Delft, one of the largest biscuit manufacturers in the Netherlands. Its products also include Count Down granola bars, but it is best-known for its wafers sold under the Pink Panther brand. The manufacturer also makes close to 1.4 million wafers a day for supermarket own-label brands.
It is understood that despite Van Delft having invested £7 million in production facilities since 2009, Rivington has been struggling amid intense pressure in the supermarket food price war.
The situation was worsened by the Brexit vote and the fall in the value of sterling. Many ingredients, such as sugar, flour and vegetable fat, are bought in Europe and paid for in euros but its products are sold in sterling. Since the EU referendum, the pound has fallen 15 per cent against the euro, meaning that Rivington was forced to absorb a double-digit increase in costs.
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Yesterday, the company, which made a pre-tax loss of £340,000 in the year to December 31, said that it had no viable alternative other than to seek administration. It is understood that 85 per cent of Rivington’s staff were paid weekly, up until December 2. Any back pay owed can take at least three weeks, meaning that some staff may not receive pay until after Christmas.
Hidden charges
Unilever The costs faced by manufacturers since Brexit were first highlighted by Unilever after it tried to increase the cost of its goods, from Marmite to Surf detergent, by 10 per cent or so. Its attempt was met with fury by many supermarkets and the row became so heated that Tesco temporarily removed all of Unilever’s products from its website before reaching an undisclosed agreement on price.
Chocolate Some manufacturers are “re-engineering” their products, making them smaller. The most conspicuous example was Mondelez International, which widened the spaces between the “peaks” in Toblerone to use less chocolate. Terry’s Chocolate Orange and Maltesers have also shrunk in size.
Dairy Danone, the French yoghurt maker, reduced its Activia Big Pot by 50g but is selling it at a higher price.