Food firm hit by horsemeat scandal

The horsemeat scandal contributed to one of the country’s largest food processors, the Co Waterford- based Arrow Group plunging into the red last year.

New figures show that the firm recorded a pre-tax loss last year of €11.6m following a pre-tax profit of €2.34m in 2012 — a negative swing of €13.94m.

This followed revenues at the group — which employs 1,603 and is owned by brothers, Peter, John and Michael Queally — declining by 3% from €443.56m to €429.35m.

The directors state that “2013 has been a difficult year for the group suffering a decrease in turnover and profitability”.

The directors that “certain group subsidiaries were impacted by the European beef mislabelling issue which significantly reduced demand and price for certain beef products and frozen ready meals”.

One of the firm’s subsidiaries, QK Meats apologised in May 2013 for its handing of the horsemeat scandal. In a report, the Department of Agriculture strongly criticised QK Meats into how horsemeat got into Irish-made meat products, pointing out that QK knew it had equine DNA in some product imported from Poland from June 2012, but did not tell the authorities until 2013.

The company stated it never knowingly incorporated horsemeat into any of its beef products and pointed out no material that tested positive for equine DNA was allowed into the food chain.

Minister for Agriculture Simon Coveney confirmed that QK Meats had broken no laws.

The Arrow directors state that before exceptional costs of property impairments, restructuring costs and the impact of the Euro mislabelling issue, the group recorded a pre-tax loss of €2.7m compared to a profit of €8.2m in 2012.

The principal activity of the group is the processing of pork, meat processing and meat trading and the directors also blamed an upward trend in input costs for the drop in profitability last year.

The Arrow Group accounts state that as a consequence of the European beef mislabelling issue, “one of the group’s subsidiaries was significantly impacted as a result of a shift in market demand for the subsidiary’s product offering”.

The directors state as a result, the subsidiary suffered ‘lost contribution’ and the best estimate of this in the loss for the year is €4.5m.

The directors also stated that the firm ceased operations at one of its subsidiaries during the year that resulted in asset impairment costs.

Staff costs last year increased from €59.8m to €60.2m mainly as a result of redundancy costs of €2.49m.