UK retailer Morrisons has announced the acquisition of Chippindale Foods, a supplier of free range eggs based in Flaxby, North Yorkshire.
With the acquisition, Morrisons said that it will be able to ‘bring forward’ the date at which all of its eggs will be sourced from non-caged hens, which is currently set at 2025.
‘Sustainable Supply Chain’
It said that the addition of the Chippindale Foods business to its manufacturing operations will enable the retailer to ‘work closely with egg farmers to support a sustainable supply chain, the welfare of hens and the quality of their eggs’.
Morrisons currently operates 17 manufacturing sites, producing bakery, seafood, meat, fruit & veg, flowers and chilled processed products for its 491 stores across the UK. The 54 staff employed at the Flaxby site will join the Morrisons team.
"The addition of Chippindale Foods to our fresh food manufacturing business will give us the opportunity to build on our deep relationships with British farmers and become even more competitive for our supermarket and wholesale customers,” said Andrew Thornber, Morrisons manufacturing director.
Analyst Clive Black of Shore Capital Stockbrokers described the move as a ‘cracking deal’ that bolsters Morrisons’ vertical integration.
“The deal is not likely to do more than marginally nudge ahead our future financial expectations for the Group, which we shall re-visit with the preliminary results,” Black said.
“However, the acquisition further underscores Morrisons' vertical integration, brings more control into the business, potentially enhances its manufacturing contribution - which can be invested into product and price - and in this specific case brings forward the date at which all of the Group's eggs will come from non-caged hens. As such we see this small deal as a potentially cracking one.”
© 2018 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones Click subscribe to sign up to ESM: The European Supermarket Magazine.