Farms for sale as Co-operative plots comeback

THE troubled Co-operative Group is looking to cease operations at its two Yorkshire farms as part of a mass sell off of its substantial farming assets.
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The group is reportedly set to announce losses of £2bn in results for 2013 next month and has started the process of selling its agriculture business as bosses plot a revival.

The group is reportedly set to announce losses of £2bn in results for 2013 next month and has started the process of selling its agriculture business as bosses plot a revival.

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Its agriculture arm dates back to 1896 and covers around 50,000 acres across 15 farms in England and Scotland, including Pasture Farm at Swinefleet near Goole in East Yorkshire, a site it has farmed since 1917. Potatoes, vining peas, wheat, barley, rapeseed, sugar beet and honey are produced at the farm, which runs to more than 1,400 hectares and produces thousands of tonnes of pre-packing potatoes each year for distribution to Co-op stores throughout the UK.

The Co-op is also looking to cease its operations on the Wykeham Estate in the village of Wykeham, Scarborough where it has been working with Viscount Downe’s Dawnay Estates since 1998.

A Co-op spokesman could not confirm how many people were employed at each site, but that around 200 people worked across its farms in total.

Buyers are also being sought for three produce packing sites, two in Dundee and one in Staffordshire, while the mutual confirmed it was exploring options on its pharmacy business, including the sale of all or part of the operation. The division is one of the UK’s three largest pharmacy chains, with 750 branches and 6,500 staff, but it has felt the brunt of attempts by the Government to cut back on the cost of prescriptions

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In a statement, the Co-op said: “As part of the wider strategic review of all of its businesses, The Co-operative Group has decided that its farms are non-core and has started a process that is expected to lead to a sale of the business.

“In addition, it is exploring options for the future of the pharmacy business; this could include the sale in whole or part of the business.”

Phil Hudson, head of food and farming at the National Farmers’ Union (NFU), said he was keen for the Co-op to spell out its commitment to supplying British produce in light of the developments and reflected that the farms sale could prove to be a great opportunity for other growers to take over.

Mr Hudson said: “The Co-op’s decision to sell off its farms follows a strategic assessment of what it considers to be its core businesses in the future.

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“The Co-op has recently invested in building its links with British farming and we will be keen to receive assurances that Co-op will continue to support British farms across all categories following the sale of its farms business.

“We have been reassured that today’s announcement will not affect Co-op’s commitment to sourcing 100 per cent British milk, eggs, beef, pork and dairy.”

“The Co-op’s agricultural education programme has largely been through Co-op farms so we’ll be keen to work with them to ensure their farming education programme continues to promote agriculture.

“There is huge confidence in the agriculture industry at the moment and this could provide a significant opportunity for existing farmers and potential new entrants to the industry.”

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Morrisons director Martyn Jones was put on the spot at the NFU’s annual conference in Birmingham yesterday, when he was asked whether the Bradford-based supermarket chain had any plans to bid for the Co-op’s farms.

In response to the question during a panel debate, Mr Jones said: “We have no plans at this stage. It’s very new news.”

Elsewhere within the business, the Co-op’s banking arm is now under the control of bondholders as part of a refinancing to fill a £1.5bn hole in its balance sheet, which is expected to drive the group to an overall loss of more than £2bn, according to the BBC.

The group is facing a raft of inquiries into what went wrong at the bank, with regulators recently launching formal investigations that could see former senior managers fined or banned from working in the industry.

The company’s financial results are due on March 26.

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Michael McGowan, a member of the Leeds and Wakefield area committee of the Co-op Group, said it was “the worst crisis in the history of co-operative movement”.

The decision to sell off the farms and the manner of the announcement suggests that both directors and executives should consider their positions, he said.