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Britain's Pound Strength Threatens KitKat Production, Hundreds of Jobs at Risk

Strategic Insights

— 1 min read

Hundreds of workers at a British plant making KitKats are at risk of losing their jobs if Britain keeps the pound, according to Nestle. The company's York factory, which employs over 2,000 workers, including 800 on the KitKat production line, faces significant financial losses due to the high value of the pound, making KitKats too expensive to sell abroad. Foreign buyers are increasingly opting for Nestle's German plant, which uses the single currency, the euro.

Key Takeaways:

  • Over 2,000 workers are employed at Nestle's York factory, with 800 on the KitKat production line, facing potential job losses due to the high value of the pound.
  • Britain's exclusion from the euro has made KitKats produced in York too expensive to sell abroad, with foreign buyers opting for Nestle's German plant instead.
  • General Workers' Union spokesman Harry Donaldson warned that Nestle will have to review its UK operations unless something is done to address the level of the pound.
  • Union leaders have held talks with Trade department officials and are seeking an urgent meeting with Trade Secretary Stephen Byers to discuss the issue.
  • KitKat sales in the UK total £160 million per year, with an additional £20 million worth sold overseas.
  • Productivity at the York factory is at record levels, but the strong exchange rate makes it uncompetitive in the market.

Statistics:

  • Over 2,000 workers are employed at Nestle's York factory.
  • 800 workers are on the KitKat production line.
  • KitKat sales in the UK total £160 million per year.
  • An additional £20 million worth of KitKats are sold overseas each year.
  • Up to 5,000 tons of production has gone overseas in the last year.
  • Nestle UK employs over 10,000 people in Britain.
  • KitKat has been the best-selling chocolate bar in Britain for 14 consecutive years.

Sources:

  • General Workers' Union spokesman Harry Donaldson
  • Nestle UK's Technical Director John Sunley
  • The Mirror
  • Trade Secretary Stephen Byers
  • Former welfare minister Frank Field
  • Tony Blair

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