By Adria Calatayud

Associated British Foods said it would shut down a bioethanol plant in northern England after the U.K. government decided against offering support.

The U.K. group--which owns clothing retailer Primark as well as food-processing operations--had previously warned the plant's future was at risk without government support, blaming challenges posed by the U.K.'s trade deal with the U.S. that removed the tariff on ethanol coming into the country.

AB Foods said Friday that it would start an orderly closure process immediately and that production of bioethanol and animal feed at the plant, called Vivergo, was due to cease by the end of the month. The decision followed extensive discussions with the U.K. government, it added.

"The government has decided not to offer either short-term financial support or the long-term regulatory certainty we sought," the company said. "Given these circumstances and the financial losses already incurred, ABF has therefore determined in the interests of its shareholders that it cannot continue to support Vivergo."

The U.K. government said it decided not to offer direct funding, arguing this wouldn't provide value for the taxpayer or solve the long-term problems the industry faces. The deal with the U.S. protected hundreds of thousands of jobs in sectors like auto and aerospace, a government spokesperson said.

AB Foods said the trade deal worsened conditions for the business, but that its commercial viability was already being undermined by the way in which U.K. regulations were being applied to favor foreign producers before the agreement.

The plant employed 160 people, according to its website.

Write to Adria Calatayud at adria.calatayud@wsj.com

(END) Dow Jones Newswires

August 15, 2025 12:53 ET (16:53 GMT)

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