There was jubilation in the small northern community of Lierne in 2011, when food manufacturing company Rieber & Søn bought out the successful Lierne Bakery and moved extra production to the town. Production giant Orkla Foods Norge now owns Rieber & Søn, and announced this week it would shut down the Lierne factoy in a devastating blow for the area.
“It is the darkest day in Lierne since the black death,” the bakery’s founder, John Helge Inderdal told newspaper Dagens Næringsliv (DN). “What’s happening is a tragedy for the local community. In a year, all of the jobs will be gone.”
Lierne municipality has about 1,380 residents, and lies in the mountains of Nord-Trøndelag near the Swedish border. Lierne Bakery became famous for producing traditional Norwegian treats like lefse, a soft flat bread commonly eaten with butter, sugar and cinnamon. The factory turned around the fortunes of the historically agricultural area, and employed 125 people when Inderdal sold for NOK 133 million (USD 22 million) in 2011. Rieber & Søns also shifted its Vestlandslefsa production to Lierne.
Orkla in turn bought Bergen-based Rieber & Søn after years of overtures in 2012. The Orkla board decided on Tuesday it would close the Lierne factory in a year’s time and move the lefse production to Sunnmøre, costing 83 jobs.
Inderdal said at the time the decision to sell had been a coup, both for himself personally and for the town. He said he’d checked out all eventualities to make sure the factory would continue to operate. “Had I known that everything would disappear from Lierne, I probably would have thought differently,” he said. “Every home in Lierne is affected. The only industry Lierne has other than the bakery is a slate quarry. The closure will mean that many will have to move from the municipality.”
He did not believe he had been fooled. “What’s happened is that Lierne has been overshadowed in relation to Orkla buying Rieber & Søn. It was Toro (a soup and sauce brand) that Orkla primarily wanted, and so they got that with many other brands, including Lierne, Denja and Vossafår. It is tragic that big business takes precedence over rural communities in this way.” Inderdal said he had unsuccessfully tried to buy the Lierne factory back.
Orkla, which over time has moved from industries including mining and forestry into household goods, has struggled with a downturn in sales and market share over the last couple of years. The new Chief Executive Peter Ruzicka warned earlier this month Orkla would be cutting costs and reducing its production sites. The company currently has more than 2,000 employees across 27 sites.
Ruzicka told DN at the time about one third of Orkla’s factories were considered small, and up to 15 had overlapping production. “It is too early to say how many it’s necessary to close down,” he said. “The small and overlapping business is where there is most to gain.”
“We have started work to look over our production structure,” said Orkla’s communications director, Håkon Mageli. “We have no immediate news to communicate on the production structure beyond Lierne.”