JTI has announced that it will continue the consultation based on its initial proposal to close its Lisnafillan manufacturing facility in Northern Ireland, putting more than 800 jobs at risk.
The announcement was made following a meeting with Unite the Union and other employee representatives with JTI citing EU’s Tobacco Product Directive 2, the prospect of plain packaging, and the illicit trade among reasons for the closure.
“After conducting the first phase of our consultation and having carefully considered the joint Unite employee and management counter-proposal as well as different alternatives, the Company has come to the conclusion that our initial proposal to close the Lisnafillan facility remains the most viable option for JTI in the long-term,” said Paul Williams, JTI UK’s Head of Corporate Affairs & Communications.
Williams cited challenging economic conditions and declining sales, coupled with greater regulatory and tax pressures as the catalyst for the proposal,” he added.
JTI said it had fought “very hard” against plain packaging proposals in the UK and the EU’s Tobacco Product Directive 2, as well as the illicit trade, but “our business must prepare for the negative consequences of these”.
Around 80% of Lisnafillan cigarette production is for the UK and the Republic of Ireland. From 2009 to 2014, Lisnafillan cigarette production declined by 27%.
JTI said these declines will be exacerbated by the implementation of TPD2 which bans small packs – 81% of its current pack formats will be prohibited, which means that 40% of the overall production at Lisnafillan will be affected.
The company added that the first effect on jobs should not be felt until May 2016, coinciding with the date on which the revised EU Tobacco Products Directive (TPD2) will take effect. The plans for the closure are expected to be completed in early 2017, with production gradually moving from 2015 to other facilities in Poland and Romania.
“We take our responsibilities seriously and we will ensure that during the next phase of the consultation process, our employees will be supported and treated fairly. We recognise the effect that this announcement could have and we will work together with local leaders and politicians to address the needs of the community,” concluded Paul Williams.