Greggs sees share price fall as 
‘pasty tax’ champion moves on

Chief executive Ken McMeikan rallied customers with a 300,000-strong petition against plans to charge 20 per cent VAT on its hot pasties and sausage rolls, prompting Chancellor George Osborne to overturn the tax plans.

Mr McMeikan, who replaced long-standing Greggs boss Sir Michael Darrington in 2008, will now take the top job of group chief executive at catering group Brakes. Philip Jansen, currently group chief executive, will become chairman of Brakes, while current chairman Dwight Poler will step down from the role but is to remain on the board.

Shares in Newcastle-based Greggs fell 3 per cent yesterday. Shore Capital analyst Clive Black said: “We cannot hide our disappointment for Greggs shareholders on the announcement of Mr McMeikan’s resignation.”

He credited Mr McMeikan with a more efficient supply chain and creating a fit-for-purpose retail estate, including 28 franchise stores in Moto service stations and shops in locations such as bus and train stations.

Brakes has been owned by Bain Capital, which was founded by US presidential candidate Mitt Romney, since 2007. It is one of the largest food suppliers to the catering industry in the UK, Ireland and France and also operates in Sweden.

Greggs, which has 1,600 shops in the UK, including 120 in the Yorkshire region, said Mr McMeikan will stay in a board position for an interim period while the company looks for a successor. Greggs employs 265 employees at its Yorkshire bakery and around 1,500 people in its shop teams across the region.

Chairman Derek Netherton said Mr McMeikan had led the company through the major changes that had put Greggs in a strong position for the future, with a clear strategy for growth in a difficult environment.

The group said there had been no significant change to trading since October when it warned it no longer expected underlying sales growth in its Christmas quarter. Like-for-like sales fell 2.6 per cent in the 14 weeks to October 6 and Greggs said it had been hit by rising food prices and the continuing “restraint” of high street shoppers.

Earlier this year, the position of UK chief executive at Brakes was axed, resulting in the departure of Stefan Barden. Mr Barden left after the firm decided to implement a simplified management structure.