Vion intervenes and partially withdraws from Germany

No fewer than four of Vion's fifteen locations in Germany are being sold or closed. The meat company is taking rigorous measures to tackle the problems on the German market. Competitor Tönnies takes over two of the factories. This is evident from documents that are in the hands of the editors, but have not yet been officially confirmed by Vion. Vion does indicate that it will release information later this day.

In short, the plan involves selling the beef slaughterhouse in Altenburg and the Ahlener Fleischhandel ham factory to Tönnies. The pig deboning location in Perleberg will be sold to Uhlen. The transactions are likely to be completed in the first quarter of this year, provided that competition authorities approve the deals. Vion was unable to find a buyer for the location in Emstek, where 60.000 to 70.000 pigs are slaughtered every week. It can be read that Vion does not find the bids that came in acceptable. This means that the curtain will fall for 750 employees. In Emstek, the last pig will probably be slaughtered at the end of March, after which the location will close.

Rumors
There have been rumors in the background for some time that Vion is reorganizing the German market. Last summer the German activities were already combined separate business unit invested with the aim of tackling the problems. Vion has been making heavy losses for two years in a row. Partly due to a reservation for the German activities, the loss increased to more than €2022 million in 100. Nevertheless, the above-mentioned sales and closures are striking. First of all because of its size, but also because Vion flatly denied in October that it was divesting or selling locations. No locations would be sold or closed, was the message at the time in response to claims made by Farmers Defense Force.

African swine fever
As motivation for the decision, Vion points to, among other things, the outbreak of African swine fever in Germany, which halted exports to third markets a number of years ago. In the meantime, several sales markets have reopened, although the Chinese one is still closed. Partly as a result, Vion's activities in Germany cannot be operated profitably. The shrinkage of the German pig herd, which has created overcapacity in the factories, is also putting pressure on profitability. Vion does not want to withdraw from Germany completely: "We remain committed to building sustainable supply chains that connect farmers, customers and partners," said CEO Ronald Lotgerink.

Wouter Job

Wouter Baan is editor-in-chief of Boerenbusiness. He also focuses on dairy, pig and meat markets. He also follows (business) developments within agribusiness and interviews CEOs and policymakers.

w.baan@boerenbusiness. Nl

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