MBL moves to cut staff after Morrisons cancels DVD contracts

Lancashire-based MBL said the supermarket chain’s decision to axe the contracts after 14 years was a “significant disappointment” and will result in many job losses. AIM-listed MBL derives about 78 per cent of its turnover from Bradford-based Morrisons, and said the contracts will end on September 14.

“The notification is a significant disappointment to MBL which has had a successful long-term commercial relationship with Morrisons for 14 years,” said the company.

“The announcement will necessitate a significant downsizing of our operations and with regret the resultant loss of employment for many of our employees.”

MBL lost out in a five-month tender process to Canadian rival Cinram, which claims to be Europe’s largest entertainment distributor, with access to more than 20,000 titles.

MBL, which employs around 320 staff, said it was too soon to say how many jobs will go. The company added it is in talks with Morrisons and the new supplier about transferring some staff across under employment regulations.

MBL said it has appointed business advisers KPMG to find a buyer.

MBL also supplies Somerfield and the Cooperative supermarkets, as well as high street chains including Wilkinsons and TJ Hughes.

The company added it is in talks about stock it bought to support the contracts, which make up a high proportion of its total stock levels.

The contract termination is the latest high-profile shake-up by Morrisons chief executive Dalton Philips, who joined last year from Canadian grocer Loblaw.

Morrisons switched suppliers as it wanted to take back control over the entertainment buying process, which was previously handled by MBL as part of its contract.