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Unilever to shut aging factory
Bloomberg News
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Published: 11/21/2008 11:07 AM

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A century-old maker of spicy Dijon mustard that made the French city a household name around the world has become the latest casualty of corporate cost cuts.

Amora Maille, the French food maker bought by Unilever NV in 2000, will close its oldest factory, dating from the early 1900s, and move production of mustard, mayonnaise and other condiments out of Dijon, in eastern France, spokesman Alexis Volanov said today.

``Production in Dijon has always been difficult because of its location in the center of the town,'' Amora Maille said in a statement.

The move, to be completed by the end of 2009, will result in the loss of 265 factory and research posts, Volanov said. Rotterdam-based Unilever, the world's second-largest consumer- products company, announced plans last year to cut 20,000 jobs by 2010, most of them in Europe.

``It probably won't change the taste, but it's a shame,'' said Jeanne Poitier, a child-care professional who was buying Maille mustard at a supermarket in central Paris. ``Real Dijon mustard should me made in Dijon.''

The Dijon factory's production has fallen 42 percent since 2002, Amora Maille said. French demand for mustard had declined 5 percent, while that for mayonnaise has slipped 9 percent since 2003, it said. The company's sales slumped 20 percent during the period as consumers turned to cheaper brands.

Traditional Recipe

Production from Dijon and another factory will be moved to the nearby town of Chevigny-Saint-Sauveur, Volanov said. The company will invest 26 million euros ($32.7 million) in the new site.

Unilever, like its Cincinnati-based bigger rival Procter & Gamble Co., is facing a decline in sales volumes in western Europe as rising food prices drive consumers to discount brands.

The recipe for Dijon mustard, which includes the juice of unripe grapes, dates from mid-19th century. Most seeds used to make Dijon mustard today are imported, particularly from Canada.