Exclusive: Profits taste sweet for Haribo’s UK arm

BRITONS’ fondness for sweet treats helped the UK arm of Haribo, based in Yorkshire, to nearly double profits last year despite the long spell of economic uncertainty.

The firm, based in Pontefract, hailed a “highly successful” year for the Haribo brand and vowed to continue growing despite tough market conditions.

Dunhills (Pontefract), which trades under the Haribo name, made pre-tax profits of £21.96m, up from £11.54m, for the year to December 31. Turnover increased to £113.16m, from £98.23m.

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The strong rise in sales, of 15.2 per cent, means the firm beat the target outlined in the Yorkshire Post last year, when managing director Herwig Vennekens said they “could” grow by 12 per cent.

Yesterday Mr Vennekens said they had been helped by tailing their products to meet the needs of hard-pressed consumers.

“Making sure that a brand is affordable is crucial for its success, particularly during difficult economic times. We continue to reinforce this through our price promotions including £1 price marked packs that were introduced in 2010 across many 250g bags. Price marked packs have performed extremely well in the market and more and more brands are adopting this strategy.”

Haribo is one of West Yorkshire’s largest private sector employers with nearly 480 staff at its Pontefract factory, currently its only domestic site where gums, jellies and liquorice are made for the UK and Irish market, as well as exported to countries such as Canada, Australia and Kenya. It is part of the family-owned sweets firm based in Bonn, which has 6,100 staff worldwide.

Last month, Haribo’s British arm discovered it would be one of seven Yorkshire projects to share a £47m Government fund set up to crack the North-South divide. Vince Cable, the Business Secretary, said it would “probably” have closed its Pontefract base without the help to build a new plant in Normanton, but it will now safeguard the existing 478 jobs and create another 286.

Mr Vennekens said the funding – the final details of which have still to be confirmed – show the firm’s commitment to Britain and will allow it to manufacture more products rather than importing from other Haribo businesses.

“An additional facility is crucial for the long term sustainability of the UK as a production base for Haribo as it allows for the manufacture of our volume requirements for the UK in this country and over the coming years offers the potential to export products.”

Haribo sells its sweets, which include Starmix and Tangfastics, in supermarkets including Tesco, Leeds-based Asda, Sainsbury, Bradford-based Morrisons and Top Shop as well several cash-and-carry firms, including Booker and Palmer and Harvey.

Their market share rose during 2010 and post-year-end figures, for the 12 months to March 19 by volume sold, show Haribo had 29 per cent of the gums and jellies sector and Maoam had 22.9 per cent of soft and fruity chews.

“Haribo continued to be highly successful with sales growing strongly ahead of the market with increased brand and sales support as well as new product launches,” the directors’ report said.

The firm faced increased raw material costs on chocolate, as part of the global surge in commodity prices, and warned of further rises in the ingredient costs this year, although demand is expected to hold up because the sweets are seen as value for money.

The directors added: “Looking ahead we expect confectionery consumption to remain fairly stable in the UK. The significant increases in raw material costs are expected to drive price increases in the market and impact negatively on profits. We are confident that we will continue to grow our business in these challenging market conditions.”

Operating profit for 2010 was £20.67m, up from £10.06m the previous year.

Firm attracts famous fans

Dunhills’ Pontefract Cakes have been made in the town since 1760. Haribo took a majority stake in Dunhills in 1972 and then bought the rest of the company in 1994, when it began operating in the UK. The origins of the German firm go back to its creation by Hans Riegel in 1920. Its name comes from each of the first two letters of the entrepreneur’s Christian name, surname and of Bonn, Herr Riegel’s home city.

Haribo sweets are believed to be eaten by Prince Harry and Sheffield athlete Jessica Ennis. The new Duchess of Cambridge is also a fan and earlier this year Haribo launched the Royal Wedding-inspired Hearts and Rings and Other Nice Things at her family’s local convenience store in Bucklebury, Berkshire.