Barry’s Tea to create stir with Batchelor buyout

BARRY’S TEA is on course to make its first major acquisition with the €60m purchase of Batchelor Canned Foods from troubled British company Northern Foods.

Barry's Tea, which has generated consistently high profits over the last 10 years €6.1 million in the year to April 2002 on sales of €26 million has been running the rule over a number of potential Irish acquisitions and now seems set to swoop on Batchelor's.

Industry sources said Barry's, chaired by former Foreign Affairs Minister Peter Barry, were in the process of completing the normal pre-takeover due diligence investigation of Batchelor's operations and the verification of material facts.

Barry's Tea is also believed to have negotiated funding for the buy-out with its bankers.

Barry's Tea management team led by Tony Barry, son of chairman Peter and his wife Margaret, intend to keep Batchelor's chief executive Eugene Heary and other management in place and do not at this juncture envisage any integration of Barry's operation employing 75 people and Batchelor's plants and its 280 staff.

"They will want to grow this business at a rate of knots," one senior industry source said yesterday.

The scale of the proposed acquisition by the Cork family-owned firm has taken the food industry by surprise.

It is seen as a declaration of intent by the Barry' Tea dynasty of its ambition to grow its business interests by acquisition and extend its range of operation while keeping to the general business area it knows well.

Batchelor's already enjoys market leadership in the canned vegetable business and is understood to return profits of €5.6 million from annual sales of €75 million.

As Northern Foods concentrated on its global brands, Batchelor's marketing took second place in recent years but the company's production facilities are described as being "up there with the best."

Batchelor's dominate the €27 million-a-year baked beans' market with a 58% share, by value.

The trade magazine Checkout said of the Batchelor's bean business: "with market penetration of over 90%, it remains a must-have item for all consumers.

"The equivalent of every household buys at least two cans of Batchelor's beans each month." Meanwhile, Batchelor's peas have a near 80% share, by value, of its market and now outsell all of its combined competitors by over two to one.

Batchelor's also own the Squeez orange juice brand and Picnic canned fish. The company also has exclusive Irish agencies like the canned fruit brand Lustre, Old El Passo, the Italia Menu range as well as distributing product for Shippams.