Jobs to go under Nestle plan to exit lolly-making in New Zealand

Nestle NZ has sold Kiwi confectionery brands Mackintosh, Black Knight, Fabulicious Red Licorice, Heards, and Oddfellows. Photo / Getty Images

Nestle NZ has sold kiwi confectionery brands Mackintosh, Black Knight, Fabulicious Red Licorice, Heards, and Oddfellows to the makers of RJ's and Darrell Lea licorice under a conditional agreement.

Nestle Confectionery general manager Martin Brown said Nestle regrets that the proposal will mean job losses at their Wiri factory in South Auckland.

"This doesn't reflect on the personal efforts of our staff. It has been based on a careful consideration of how to focus our activities and resources, recognising that our sugar confectionery range in New Zealand is largely made up of smaller local brands," Brown said.

Under the proposal, up to 55 jobs will be made redundant from a workforce of over 270.

Nestle NZ said they hope there will be voluntary redundancies in the first instance, but will offer generous redundancy packages and access to outplacement services for all affected staff.

Around 200 workers at the plant are members of the E tū union.

Phil Knight, E tū Industry Co-ordinator of Manufacturing and Food, said that "while the union-negotiated collective agreement has very generous redundancy provisions, it is not the same as a job, and we are worried about this coming on top of other job losses in the food manufacturing industry in New Zealand."

E tū said they are very disappointed by the announcement of job losses at Nestle's factory.

"We were assured there were none, so this has come as a bolt from the blue.

"Not only is this the opposite of what we were told, but we weren't invited to the meetings they held with our members late yesterday afternoon to deliver this news, prior to the public announcement."

Under a conditional agreement, Australian-based Quadrant Private Equity - owners of RJ's and Darrell Lea confectionery brands - will offer Wiri staff losing their jobs new roles at RJ's factory in Levin.

Knight said workers may be offered jobs at Quadrant's Levin-based factory, "but we have yet to learn the detail of the sale proposal, let alone any alternative work offers."

In the meantime, he said the union is supporting its members "who are going through the usual range of emotions that you'd expect from an announcement like this."

RJ's national sales manager, Amy Law, said the company will be working though details of extra employee numbers over the next few weeks.

"We will be discussing opportunities with the Nestle team to transfer any of their employees who are interested."

RJ's, a New Zealand licorice brand, will continue to manufacture these local brands in New Zealand. However, the Lifesavers confectionery brand will move to Australia after being purchased by sister company Darrell Lea.

Knight said the restructure will also see production of Nestle's Scorched Almonds move to a third-party contractor in Melbourne, while production of the Lollipops brand will move to China.

"We were aware of the sell-off of product lines and cuts to staff overseas, so we asked the company specifically if there were any such plans for New Zealand."

Tim York, chief executive of RJ's, said the brand had doubled in size over the last 5 years due to strong domestic and export growth in the USA, Canada and the UK.

"[This acquisition] broadens our confectionery offer beyond the licorice segment," York said.

Law said, "we are extremely excited about this potential opportunity. Being able to add these iconic NZ confectionery brands to our business gives RJ's greater strength within the confectionery category."

RJ's does not intend to make any changes to the lollies once production transitions to their factory.

"The Nestle products are extremely popular in New Zealand so it is our intention to keep the product recipes exactly as they are."

Nestle NZ will shift its focus to its major chocolate, baking and medicated lozenge brands in New Zealand. Culinary products will be the main production at its Wiri factory, including Maggi soups, recipe mixes and other products to be sold domestically and exported globally.

Knight said this decision comes soon after the Cadbury closure and follows announcements of future job losses at Griffins and Kraft Heinz Watties.