Ragolds Süsswaren: production to cease by end of 2005

Following the sale of core brands Rachengold and Atemgold to Storck KG Berlin, management at Ragolds Süsswaren GmbH & Co KG, Karlsruhe announced that production is to cease by the end of 2005. The company, well-known as manufacturers of cough sweets and fruit flavoured boiled sweets, is working to negotiate a favourable redundancy plan for the 150 employees affected by the closure.

The family-owned company sold US brand Velamints to Wrigley in 2001, and Gletschereis to Katjes Fassin in 2003. Ragolds sales decreased from € 49.1 m in 2002 to € 39.3 m last year. Senior executive Jörg Schindler (75) explained the downturn was caused by an overall decline in the market for hard caramels - especially for cough sweets and fruit sweets - growing competition and the increasing cost of ingredients. An internal cost reduction programme failed to compensate for plummeting sales and the impact of a downwards price spiral. In an attempt to save the Karlsruhe facility Ragolds say they invested over € 24 m between 1992 and 2004, including € 1.3 m in environmental protection measures.

Despite considerable success abroad during the 1990 s continuing subdued consumer spending and fierce competition on the home market during 2001 and 2002 put Ragolds in the red. Jörg Schindler responded quickly, trying to halt the downturn by selling brands and equipment, concentrating on core products and investing further capital in a comprehensive modernisation programme. He was, ultimately, unable to forestall the inevitable: for the traditional company the end had come.

Shortly before, Bernd Rößler, spokesman for the Storck group, confirmed that Storck would be acquiring brand rights for Rachengold and Atemgold by the end of 2005, pending approval from regulators. No details of the sum involved were revealed. Storck plan to relocate production of Rachengold and Atemgold - both on the market for over 70 years - to the Storck facility in Halle/Westphalia. Rößler said both brands possessed "great potential".