Kerry Group loses major deal

Kerry Group loses major deal

By Eamon Quinn

Kerry Group has lost a major contract for its convenience/ready-meals to supply Tesco stores in Britain.

The foods giant handled the contract at its plant at Burton-on-Trent, which employs 1,000 people.

Tesco said that, after a six-month review, it will cancel the contract from next June but didn’t give reasons.

Tesco earlier this year completed the €4.5bn acquisition of wholesaler Booker and is also battling against rapid change in the supermarket landscape after rival Sainsbury bid to buy Asda for €8.3bn. Experts said both deals would likely affect Irish food firms.

In its interim management published in August, Kerry said its “convenience meal solutions” was hit by factors such as the hot summer, adding that its frozen meals sales “continued to be challenged”.

A Kerry spokeswoman said: “Regrettably, a major customer has confirmed to Kerry Foods that it will be moving our chilled meals business currently produced at our Burton site to another supplier.”

It is seeking new business to replace the contract.

Tesco said:

Following an extensive six-month review we have taken the decision to make changes to the supply chain for our Indian and Oriental ready meals. We remain absolutely committed to working in partnership with all our suppliers and will do all we can to support Kerry Foods during the transition process.

A UK regional official of the Unite trade union said the Tesco contract accounted for 75% of the output of the Burton-on-Trent plant.

Separately, Kerry Group said it plans to pay €365m for two acquisitions in the US and Oman, which will boost revenues by around €150m and be funded from existing facilities.

The US purchase is Fleischmann’s Vinegar Company, which makes “certified all-natural” food ingredients

, with plants across the US and at its home base in California, Kerry said

.

AATCO Food Industries makes sauces and has its head office in Oman and plants in Oman, Saudi Arabia, and in India.

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