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Thursday, 16 August, 2001, 16:45 GMT 17:45 UK
Nestle in talks over ice cream sale
Women eating ice lollies
Nestle's UK ice cream business isn't big enough to compete
The Swiss food giant Nestle has said it is in talks to sell its UK ice cream business to Richmond Foods - the UK's largest maker of own-label ice-cream.

The Nestle business includes brands such as Orange Maid and Zoom, and also includes the ice cream versions of snacks such as Kit-Kat and Fruit Pastilles.

The company said if it did sell the business to Richmond Foods, it could not rule out the possibility of job cuts.

Nestle employs 230 people in the ice-cream business in Telford and York.

Richmond Foods is the biggest seller of own-label ice-cream to supermarkets in the UK, and also makes Ribena and Chewits lollies.

In a statement it said if the negotiations with Nestle were successful it would win "the right to manufacture, import, distribute and sell Nestle's range of ice cream brands in the UK".

Prospects of a deal sent Richmond Food's share price rocketing 30p to 200p on Thursday, the stock's highest close for at least five years,

'Substantial redundancies'

Nestle's interest in the UK ice cream market began in 1992 when it bought Clarke Foods from the receiver.

But Graham Millar, group finance director for Nestle UK, admitted the company had failed to expand the business sufficiently.

"We've all tried hard for nine years to develop our ice-cream business but have not been able to make it big enough to compete in a difficult and competitive market place," he said.

The 230 workers at Nestle's manufacturing plant at Telford, and sales centre in York now face an uncertain future.

"Richmond have indicated to us that they will be examining various options which, unfortunately, may result in substantial redundancies among the 230 employees working in the business," Nestle said in a statement.

See also:

23 Feb 01 | Business
Nestle's profits surge
09 Jul 01 | Scotland
Ices firm seeks a cool £3.5m
10 Jul 00 | Business
Nestlé in sterling debate
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