Heinz Wattie’s Job Cuts: 350 Roles Affected by Factory Closures – 1News

The sweeping changes announced yesterday by Heinz Wattie’s, including proposed closures of its Auckland, Christchurch and Dunedin factories, are sending ripples through the New Zealand food industry and leaving approximately 350 employees facing an uncertain future. The company, a subsidiary of US-listed Kraft Heinz, cited a challenging manufacturing environment and global economic pressures as key drivers behind the decision, which will also see the discontinuation of several product lines including frozen vegetables, Gregg’s coffee, and dips sold under brands like Mediterranean, Just Hummus, and Good Taste Company. Packing will also cease at the associated frozen lines in King Street, Hastings.

A ‘Perfect Storm’ of Economic Headwinds

According to Heinz Wattie’s managing director Andrew Donegan, the decision wasn’t taken lightly, and numerous alternatives were explored before arriving at this point. He attributed the move to a confluence of factors, including high global inflation and “various industry challenges” impacting the commercial performance of the business. 1News reported that Donegan emphasized the company’s commitment to supporting affected employees through career transition services and redeployment opportunities where possible.

The closures represent a significant shift for a company founded in 1934 by Sir James Wattie, historically known for its tomato sauce, baked beans, and a wide range of fruit and vegetable products. While the company intends to continue manufacturing hundreds of products for export to markets like Australia, Japan, and the Pacific Islands, the scaling back of local production signals a broader recalibration of its New Zealand operations.

Impact on Workers and Communities

The immediate impact of the proposed closures is the potential loss of 350 jobs across the three manufacturing sites and associated packing operations. Control systems engineer Myles Morris, speaking outside the Christchurch factory to 1News, expressed his dismay at the “cold” and “clinical” manner of the announcement, and voiced concern for long-term employees. He also highlighted the broader impact on the Canterbury region, noting the company’s importance to local growers, and suppliers.

Finn O’Dwyer-Cunliffe, director of the E tū union, echoed these concerns, stating that workers were “gutted” by the news and felt blindsided by the decision. He indicated the union would explore alternatives to mitigate job losses, but acknowledged the difficulty of countering a company-wide strategic shift. The union is seeking further information and will be engaging in consultation with Heinz Wattie’s regarding the proposed changes.

Beyond the Factory Floor: Supply Chain Implications

The impact extends beyond the immediate workforce. The Post reported that approximately 220 growers are also facing uncertainty as a result of the closures. The loss of a major purchaser like Heinz Wattie’s could significantly disrupt the supply chain for locally grown produce, potentially leading to further economic hardship for farmers in the affected regions. The long-term effects on New Zealand’s agricultural sector remain to be seen.

Rising Costs and Shifting Consumer Preferences

Donegan pointed to increasing utility costs – gas and electricity specifically – and challenging crop seasons as contributing factors to the decision. These rising input costs, combined with the broader cost of living crisis impacting New Zealand consumers, have created a difficult operating environment for food manufacturers. The company is responding to a market where consumers are increasingly price-sensitive, potentially favoring cheaper imported alternatives.

This dynamic is not unique to Heinz Wattie’s. The New Zealand manufacturing sector as a whole has been grappling with rising costs and global competition. The closures underscore the challenges faced by local producers in maintaining competitiveness in a rapidly changing economic landscape.

Government Response and Future Outlook

Finance Minister Nicola Willis acknowledged the impact of the closures, expressing sympathy for affected workers and stating the government is taking steps to lower costs for industries like food manufacturing. Labour’s Kieran McAnulty described the move as a “massive shock” and highlighted the impact on a long-standing New Zealand brand.

While Heinz Wattie’s intends to remain a significant employer in New Zealand, focusing on exports and maintaining production of core product lines, the closures represent a contraction of its local manufacturing footprint. The company’s future success will depend on its ability to navigate the ongoing economic challenges and adapt to evolving consumer preferences.

What’s Next: Consultation and Potential Redeployment

The proposed closures are subject to consultation with affected employees and unions. The final number of job losses will be confirmed following this process, and the company has indicated it will explore redeployment opportunities within the business. The timeline for the closures is expected to unfold throughout the year, with the phased discontinuation of the affected product lines. Stakeholders will be closely watching the outcome of the consultation process and the company’s efforts to mitigate the impact on workers and suppliers. The Kraft Heinz Company’s overall strategy for the New Zealand market will also be under scrutiny as it navigates these significant changes.