(Randy Holt/Associated Press)
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Associated British Food Plc’s Vivergo ethanol plant, one of only two major sites in the nation, has begun closing-down procedures as a flood of U.S. duty-free products looks set to wipe out production in the U.K.
A consultation with employees to enact a wind-down of operations of the site in northern England has begun, the company said in a statement. The plant plans to close Sept. 13 if a solution is not found by the British government to support the industry.
British ethanol producers have warned for weeks that 1.4 billion liters of duty-free ethanol included in a U.S.-U.K. trade deal would destroy the domestic market. Vivergo ceased buying wheat, a feed stock, on June 11, while Ensus Ltd., another producer, has said their plant faces imminent closure.
Vivergo is in talks with the government, which has committed to a formal consultation. But “unless the government is able to provide both short-term funding of Vivergo’s losses and a longer-term solution, we intend to close the plant,” the firm said.
“It’s disappointing to see this announcement after we entered into negotiations with the company on financial support yesterday,” Prime Minister Keir Starmer’s spokesman, Tom Wells, told reporters in London on June 26, without providing further details.
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