Financial News

  • 27 February 2014, 11:20

Co-op Hits 6,500 Staff With Job Uncertainty

The Co-operative Group has confirmed it may sell its pharmacy business, employing 6,500 staff, as part of its strategic review.

It is also looking to offload 15 farms it owns, which have an estimated land value of 49m.

The review - ordered in the wake of the financial crisis at its bank - is yet to be completed.

But a short statement on Wednesday 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."

The Co-op operates 15 farms, three in Scotland and the rest in England, covering 50,000 acres in total with an estimated land value of hundreds of millions of pounds.

The division also owns three packing sites.

They are seen as surplus to requirements because the cereals and vegetables they produce only make up a small proportion of produce for Co-op supermarkets.

The chemists business, which operates out of 750 outlets, has suffered in recent times amid Government attempts to reduce its prescription costs.

The group ordered the strategic review after a huge 1.5bn capital black hole emerged in its banking arm, resulting in control passing to bondholders including US hedge funds.

The problems at the bank are currently subject to a number of inquiries.

The scandal also brought the appointment of Paul Flowers, now ex-chairman of the bank, into the spotlight amid questions about his lack of banking experience.

Just nine days ago the Co-op Group launched an online poll to help shape its future, admitting the mutual had lost touch with its customers and members.

Group chief executive Euan Sutherland said it would listen to suggestions and the results would feed into the strategic review.

The Co-op operates a wide variety of businesses, including supermarkets and funeral services.

Its 2013 results - due to be released in late March - are expected to confirm growing losses.

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