UK Parmalat employees fear future

Britain's General Union (GMB) claim that the 216-strong work force at Parlamat's UK headquarters are frustrated at the lack of information that they have been given regarding both their own and the unit's financial future.

The recent discovery of the Italian company's debts being more than predicted is thought to have contributed to the tension at the plant. It is now estimated that Parmalat, Italy's eighth largest company, has financial black hole in its books that has welled to €14 billion.

This revelation has led to speculation within the trade union members. It is a possibility that the unit could be sold to another interested company. A spokeswoman for the site announced that the company would be looking into all options available given the changing circumstances at the Italian company. But it is perhaps this type of vagueness that is causing employees concern.

Industry observers, management at the site and indeed the Italian company itself claimed that the UK Unit of the company would be safe because the company's finances were sound. Yet this has not been enough to silence the trade union's questioning.

Duncan Edwards from the GMB has said that the trade union, which represents a quarter of Parmalat employees at Kendal, has spoken to North West MEP Brain Simpson on the matter. Simpson has pledged to take the issue to the Department of Trade and Industry and the North West Regional Development Agency as a matter of urgency.

Earlier this month GMB members leafleted employees outside the plant in an effort to warn them of the problems that could lie ahead. But more so in an effort to goad a response from those in charge.

Scandal consequences​

The Parmalat scandal erupted when a €3.9 billion hole in the companies overseas accounts was discovered in December last year. The crisis has had consequences for both the domestic dairy market and the market in some other countries where the company had activity.

The UK Parmalat subsidiary is relatively small in comparison to other units. The food group has 43 dairy plants spread across 30 countries. It is the Italians that have been hit the hardest by the company's downfall. Earlier in the month it was estimated that Parmalat owed Italian dairy farmers €120 million for milk they had produced.

Other regions affected by the scandal include France and Brazil which are yet to receive full payments for milk produced. It has had a limited affect in Europe. Other European dairy markets appear relatively unaffected by the financial fraud.

However, some speculation still exists. Fernando Cardoso, the chairman of the Portuguese Dairy Association claims it is business as usual for the Portuguese unit. But he told DairyReporter​ that the dairy group Dean Food is building its first factory in the country and if Parmalat failed to pay it would be likely that Dean Foods would step in.

Mike Beessey, an independent UK dairy consultant agreed that the emergence of new suppliers would support milk producers if Parmalat was unable to make payments.

With the revelation of the new hole in the company's books, spectators have said that the affair is actually a bigger financial fraud than the Enron case in the US.Recently the former finance director, Fauto Tonna committed suicide after throwing himself from a bridge in Parma, the company's home town.