first_imgWednesday 17 November 2010 8:47 pm KCS-content Retailers may have to eat own margins whatsapp Show Comments ▼ THE chilled convenience food market is ripe for consolidation. In recent years, the major players have lacked the scale needed to secure a decent return from powerful supermarket retailers. Investment has fallen, taking its toll on the quality of products. For that reason, the marriage of the two leading chilled players in the UK market makes perfect sense. If the almost nil premium merger goes ahead, the rest of the compeition will pale in comparison. Icelandic Bakkavor has struggled since the island’s banking woes, while RF Brookes, the chilled unit of Premier Foods, is looking tired. The pair expect to make some £40m in cost savings, 90 per cent of which will be achieved in the first two years. Crucially, these synergies are not based on a predicted surge in revenues, which might never materialise; instead, Essenta (as the new company will be known) will save £15m by cutting overheads; £20m on more efficient procurement; and £5m by moving Northern Foods’ tax domicile to Ireland (a rare piece of good news for that emerald isle). However, the main advantage is the extra clout that Northern Foods and Greencore can expect in the future. The proposed merger will create a clear number one player in private label ready meals, coupled with a handful of successful brands. With annualised sales of around £1.7bn, it will be a force to reckon with: supermarkets might have to eat into their own margins instead of their suppliers’. Shareholders should support the merger. Northern and Greencore would have a less certain future if they went it alone. Ad Unmute by Taboolaby TaboolaSponsored LinksSponsored LinksPromoted LinksPromoted LinksYou May LikeBlood Pressure Solution4 Worst Blood Pressure MedsBlood Pressure SolutionUndoBlood Pressure For LifeWhy Doctors May No Longer Prescribe Blood Pressure MedsBlood Pressure For LifeUndoTotal PastThe Ingenious Reason There Are No Mosquitoes At Disney WorldTotal PastUndoWolf & ShepherdNFL Star Rob Gronkowski Loves These ShoesWolf & ShepherdUndoSerendipity TimesInside Coco Chanel’s Eerily Abandoned Mansion Frozen In TimeSerendipity TimesUndoLiver HealthAdvertisement 1 Bite of This Melts Belly And Arm Fat (Take Before Bed)Liver HealthUndoCompressaWhy Physical Therapists Are Recommending This Knee SleeveCompressaUndoTaonga: The Island FarmThe Most Relaxing Farm Game of 2021. No InstallTaonga: The Island FarmUndoBleacherBreaker4 Sisters Take The Same Picture For 40 Years. Don’t Cry When You See The Last One!BleacherBreakerUndo Read This NextRicky Schroder Calls Foo Fighters’ Dave Grohl ‘Ignorant Punk’ forThe WrapCNN’s Brian Stelter Draws Criticism for Asking Jen Psaki: ‘What Does theThe WrapDid Donald Trump Wear His Pants Backwards? Kriss Kross Memes Have AlreadyThe WrapHarvey Weinstein to Be Extradited to California to Face Sexual AssaultThe WrapPink Floyd’s Roger Waters Denies Zuckerberg’s Request to Use Song in Ad:The Wrap’The View’: Meghan McCain Calls VP Kamala Harris a ‘Moron’ for BorderThe Wrap’Sex and the City’ Sequel Series at HBO Max Adds 4 More ReturningThe WrapNewsmax Rejected Matt Gaetz When Congressman ‘Reached Out’ for a JobThe Wrap2 HFPA Members Resign Citing a Culture of ‘Corruption and Verbal Abuse’The Wrap whatsapp Tags: NULL Share Video Carousel – cityam_native_carousel – 426 00:00/00:50 LIVERead Morelast_img