Picture: Peter Dean, chairman of Deans Foods
After a spell of seven years of direct marketing, Freshlay Foods - a subsidiary of WJ Watkins and Son - has agreed to transfer its egg packing, marketing and distribution operation to Deans Foods. The deal will see Freshlay's contracted production base switch to supplying Deans and, following a statutory consultation period with staff, the three Freshlay packing centres will be operated by Deans. Freshlay's own bird base will also supply eggs to Deans.
Deans' chairman Peter Dean said: 'Watkins decision to withdraw from egg packing follows a period of upheaval in the industry in which the three leading retailers have changed their supply arrangements. By taking on the Freshlay operation Deans will gain three excellent packing centres and widen our national coverage.
'Most importantly, the agreement guarantees a route to market for the eggs of Freshlay's suppliers, many of whom are small family businesses. We also believe that it will benefit Deans' and Freshlay's customers by creating a bigger pool of eggs to draw on in what is becoming an increasingly tight market.'
David Watkins, chairman of WJ Watkins and Son, agreed with Deans' that the deal was in the long term interest of Freshlay's employees, producers and customers.
'After a comprehensive strategic review the board of W J Watkins and Son decided that it was in the best interests of the group to exit its egg packing, marketing and distribution operations,' said Mr Watkins.
'Increasingly fierce competition in the sector and continuing margin pressure from the major retailers meant in the board's view the long term returns from the operation no longer justified the massive capital expenditure that was required to remain competitive.'
W J Watkins and Son is a family business based in Holsworthy, North Devon, where it has extensive agricultural and other business interests, including egg production. In 1996 it withdrew its egg supply from Thames Valley Eggs and started marketing directly as Freshlay Foods.
