• Brand Republic, Monday, June 5, 2006 12 PM

Food marketer Heinz will close 20 plants in Europe over the next two years, most of them in the U.K., and will use some of the savings to increase advertising spending, the company said. The moves will amount to a $165 million cost saving for Heinz, with a further $30 million cut from head count and salary reductions. Other cuts will be made in trade spending and distribution costs, bringing the total projected savings to $355 million. Heinz has not identified which plants will close, but last month the company announced the closure of its Birmingham factory that makes HP sauce. The move caused an uproar, as Heinz said it planned to move production of the very British brand to its European Sauces Centre in Elst, the Netherlands, with the loss of 125 jobs. The food marketer plans to increase its marketing and advertising budget by 18.7 percent, from $267 million to $317 million in 2007, to strengthen its existing brands and promote new ones. One hundred new products will be developed and added to the Heinz range, including Fridge Door Ketchup, Easy Breakfast Potatoes and new recipe meals for toddlers.

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