Authority faces high bill over Breeo

THE CompetitionAuthority is facing a substantial legal costs bill following its unsuccessful High Court defence of its refusal to permit theacquisition by the Kerry Group of Breeo, the consumer foods company formed following the restructuring of Dairygold.

Mr Justice John Cooke, who last month allowed the Kerry Group’s appeal against the authority’s decision, yesterday awarded 80% costs of the eight day appeal hearing to Kerry against the authority.

The judge said he was not awarding the full costs against the authority because he had found in favour of some of its arguments, particularly regarding the issue of the closeness of private label products as a source of competition to various brands.

He said he considered “a fair balance” between the sides would be struck by ordering Kerry be entitled to recover 80% of the costs.

On March 19, the judge had allowed the appeal by Rye Investments, a wholly owned subsidiary of Kerry Group, against the authority’s determination of August 2008 prohibiting the proposed acquisition by Rye of Breeo Foods and Breeo Brands, two wholly owned subsidiaries of Reox Holdings.

Reox is an Irish unlisted plc with 26% of its shares held by Dairygold Co-operative Society and the rest by 7,500 shareholders who are mainly members of Dairygold.

The proposed acquisition involved transferring from Dairygold to Kerry the consumer foods division of Reox (the Breeo companies), several properties, including plants at Mitchelstown, Co Cork, and Tallaght, and the intellectual property rights of its business and assets, including 225 trademarks.

The trademarks comprise many well known brands, including Dairygold, Galtee, Shaws, Roscrea, Mitchelstown and Calvita.

Kerry owns other well-known trademarks, including Denny, Ballyfree, Clover, Low Low and EasiSingles. Both Breeo companies had a turnover of e200m, with e166m of that generated in the state.