Jammie Dodgers, Viscounts and Wagon Wheels will be on the menu at the ambassador’s reception after the baker behind some of Britain’s most popular biscuits was snapped up by the family that controls the Ferrero chocolate empire.
Burton’s Biscuits, which employs 2,000 people at six manufacturing sites in the UK, has been bought by a Belgian holding company controlled by Giovanni Ferrero, the Italian entrepreneur whose businesses include Kinder Surprise, Nutella and Ferrero Rocher hazelnut truffles.
The brand is famous for its television adverts showing pyramids of chocolates on silver trays served up at a mysterious ambassador’s party.
The British company is believed to have been sold for about £360m by the Ontario Teachers’ Pension Plan Board, an investment fund with extensive private equity interests, which has owned Burton’s since 2013. The baker, which can trace its roots back to the mid-1800s, includes the brands Jammie Dodgers, Wagon Wheels, Viscount, and Maryland Cookies. It was acquired by Ferrero’s Belgian holding company, called CTH.
The acquisition follows CTH’s buyout of Staffordshire-based Fox’s Biscuits for £246m in October last year and Ferrero’s £112m takeover of the British chocolatier Thornton’s in 2015. CTH also bought the Belgian luxury biscuit maker Delacre, in 2016, and Denmark’s Kelsen Group, while Ferrero bought a clutch of biscuit and snack brands from the US group Kellogg in 2019.
Last year, Giovanni Ferrero paid himself and his family a €642m (£542m) dividend from the parent group Ferrero International, which owns Nutella, Ferrero Rocher and Kinder Surprise, in one of Europe’s biggest-ever paydays.
The Burton’s deal, which requires regulatory approval, is set to finally bring about a long-rumoured merger between Burton’s Biscuits, based in St Albans, and its rival, Fox’s. The combined group will be the third largest biscuit maker in the UK, according to analysts at Euromonitor, behind Pladis, the owner of McVitie’s, and now almost level with Mondelez, which owns Cadbury, Ritz and TUC.
Burton’s, which made sales of more than £275m in the last year, began when George Burton set up a bakery in Leek, Staffordshire. George’s grandson, Joseph, formed Burton’s Biscuits in 1935.
Today the group makes biscuits under licence for Cathedral City and Marmite as well as its own labels at factories in Blackpool, Dorset, Edinburgh, Livingston in West Lothian, Llantarnam, Wales, and the Isle of Arran.
In March, the company took on extra staff at its flagship site in Llantarnam saying it had seen “record demand” for its biscuits.
Ayisha Koyenikan, food and drink analyst at the research group Mintel, said Ferrero could use Burton’s as a launchpad for its Nutella brand biscuits in the UK. The biscuits launched in Italy in 2019. “Nutella biscuits have the potential to really shake up the landscape. Ferrero has recently doubled production to increase sales abroad, and so it remains to be seen if a UK launch would be facilitated with imported products or if one of the newly acquired UK factories would be adapted for domestic production,” she said.
However, the merger will raise fears of consolidation with Fox’s facilities in Batley in Yorkshire, and Kirkham in Lancashire.
Ferrero recently closed Thornton’s remaining 61 high-street stores with the loss of 600 jobs. When Ferrero bought the loss-making business in 2015 it had 242 stores in Britain and Ireland.
Foreign takeovers of UK snack companies have been a thorny issue since the acquisition of the UK chocolate maker Cadbury by the US cheese slice group Kraft in 2010. The American company promised there would be no compulsory redundancies in manufacturing for two years – but a year later said 200 jobs would have to go. Kraft subsequently spun off its snacks business – which included Cadbury – into a new business called Mondelez International.
A spokesperson for Ferrero said: “There are no plans to change staffing levels at this point. Our primary intention is to invest in the acquired business, capitalise on exciting new growth opportunities for Burton’s Biscuits and make the integration process as seamless as possible, and this only after all regulatory approvals are obtained.”
Nick Jansa, at the Ontario Teachers’ Pension Plan Board, which has owned Burton’s since 2013, said: “Today, and in future as part of the Ferrero family, the company is well positioned for success, with its iconic brands, strong retail relationships and high-quality manufacturing operation.”