Nestlé New Zealand plans to offload its local sugar confectionery brands to focus on business in the chocolate, baking and medicated lozenge categories.
The company’s New Zealand division, based in Auckland, has reached a conditional agreement to sell Mackintosh’s, Heards, Black Knight and Fabulicious Red Licorice brands to Quadrant Private Equity, which also owns RJs and Darrell Lea licorice brands. Nestlé also plans sell Oceania brands Life Savers and Oddfellows to Quadrant.
As a result of this proposed sale, Nestlé is consulting employees at its factory in Wiri over plans to reduce output. The Wiri factory manufactures a range of smaller confectionery lines, with most sold only in New Zealand, as well as culinary products. Going forward, Nestlé will focus only on producing culinary products at Wiri, including Maggi soups, recipe mixes and other products for professional food service within New Zealand and globally.
Nestlé will also reduce the Wiri factory’s workforce from 270 to 215, first through voluntary departures. All affected staff will be offered a severance package and access to outplacement services.
“This doesn’t reflect on the personal efforts of our staff,” said Martin Brown, Nestlé Confectionery general manager. “It has been based on a careful consideration of how to focus our activities and resources, recognizing that our sugar confectionery range in New Zealand is largely made up of smaller local brands.”
Quadrant has said it intends to continue manufacturing under the brands in New Zealand, in addition to offering impacted Nestlé employees the opportunity to work at its factory in Levin.
Staff and unions have been advised of the proposal and will have the opportunity to comment on the plans over the next two weeks.
The proposed sale comes six months after Nestlé USA sold its U.S. confectionery division to Ferrero Group for $2.9 billion with the goal of focusing on business in the pet care, bottled water, coffee, frozen meals and infant nutrition sectors.