In a statement sent to Printweek this morning (25 August), the business said that Unite’s all-out strike action, which has been extended to a total period of six weeks during August and September, “has reduced the company’s orders and puts future orders at serious risk”.

Steve Moss, Cepac group managing director, said the industrial action “is causing immense harm to the business and its customers”. He felt Unite’s actions so far “would indicate that industrial action will keep being extended until Unite’s unrealistic demands are met”.

More than 90 unionised workers at the site extended their strike action over pay and conditions earlier this week by a further two weeks, to finish now on 25 September.

The strike started at 6am on 14 August after Unite had postponed previous planned strikes to hold further talks and seek an agreement.

Unite said earlier this week the extension came after “the company’s failure to engage in any meaningful negotiations”.

According to the union, Cepac offered an 8% pay increase but “the offer is subject to the workers accepting substantially worse conditions including longer hours, lower overtime rates and a change in shift patterns”. The union added it was “in effect, a significant pay cut”.

Unite general secretary Sharon Graham had said earlier this week: “Cepac’s actions are all about greed, not need. This is a company that can make a fair pay offer but is attempting to boost its profits by making its employees work longer and under worse conditions.”

Unite regional officer Pat McCourt had added the dispute was “exclusively of Cepac’s own making [and] the company pay offer along with the changes to terms and conditions would actually make our members worse off”.

But in his latest statement, Moss said: “The company had repeatedly presented alternatives to Unite, who continued to fail to fully and realistically engage with the company on what was our full and final offer. As a result, collective bargaining has come to an end, and we have made our last offer direct to our employees.”

He described the company’s offer as “generous and realistic” and one that would position the business for investment, transformation, and growth, away from its traditional and declining markets and into growth areas of volume, sustainable packaging.

“We have continuously sought to explain to Unite the challenges our site faces and the need to secure its future, including investments, and that we are seeking to work with our colleagues and Unite to achieve the basis of a turnaround, seemingly all to no avail,” Moss continued.

“Our offer to employees remains an increase in basic pay of 8% backdated to 1 January 2023 and we have requested greater flexibility and harmonisation for all employees at the level of 40 hours per working week.

“Out of a total of 91 factory colleagues at the Darlington site 54 are already working 40 hours and we are requesting 37 employees to marginally increase their working week from 37.5 hours to 40 hours and of course be paid for so doing. The result of the uplift in hours and harmonisation is a pay increase of between 15.2% and 17.5%, for the majority of factory-based colleagues.

“This has been rejected repeatedly by Unite, with zero flexibility in their responses. I also want to put on record that what has been stated by Unite as a grossly detrimental change to the sick pay scheme, applicable to all employees at the site, is in fact an adjustment for some, but an improvement for many.

“The sick pay scheme is still amongst the best in the sector. It is sad that Unite continuously and consistently seem unable to engage positively to support us in securing the future of the employees at the Darlington site.”

Moss said the results of the dispute have already put on hold investment plans previously agreed for Cepac Darlington, and there are now “severe consequences” being faced at the site, including customers needing to source elsewhere and the prospect of continued heavy losses into the future.

“We have explained very carefully, at every opportunity, to Unite and our employees’ representatives that our customers must ensure they have packaging.

“We are not the only supplier in the sector, which is fiercely competitive, and our customers will of course need to source elsewhere, if we are unable to supply them, or indeed there is a prospect of a lack of supply, which has been the case since Unite commenced the threat of industrial action several months ago.

“Regrettably the negative impacts on the business of the extended dispute now forces us to take action to minimise job losses and secure our business transformation into new sectors.”

He said the company is proposing to restructure the site and operate a differently shaped business, with a reduced requirement for complex print and increased investment in specialist coatings, corrugation, lamination, die-cutting, and gluing.

“It is also anticipated that we shall see continued growth in digital printing. I must emphasise that we shall of course work with all existing print customers to support transition to other areas of our business and to alternative suppliers, if that is required, over the coming weeks and months.”

Moss stressed the seriousness of the acceleration of the site’s transition, forced by the strike action.

“The Darlington site still has a promising future, but the withdrawal of production during the six weeks of strike action simply presents too great a risk to reinvest in printed products.

“Today we shall be forced to advise of the potential likelihood of in excess of 60 redundancies at Cepac Darlington and consultation will commence immediately with employee representatives.

“We are still committed to investment for the future into new technologies, developing the business and offering secure long-term employment, as we move into a new and exciting future.

“The need to change is of paramount importance to be successful and grow. Sadly, the structures, practices and technologies of the past 40 years are no longer applicable in the 21st century.”

Moss concluded by saying that customers would continue to be supported as much as possible.

“Customers have always been at the heart of our Darlington business, and we have sought to provide them with service and quality excellence over many years.

“We have come to this enforced decision point to restructure with great sadness, but we would prefer to achieve a manageable transition for our customers and our business, which an extended period of strike action does not permit.”

Unite has not yet responded to today's statement from Moss.

Cepac produces corrugated packaging and serves clients including HBCP, which in turn supplies customers including Greggs, Costa, Subway, and Pret A Manger, along with C&D Foods Group, whose customers include Aldi, Tesco, Morrisons, and Asda.

Other customers include Mars, Carlsberg, Innocent Drinks, Pernod, Lidl, Sainsbury’s, and Diageo.