Dairygold under pressure to repay aid

DAIRYGOLD, which is to close a cheddar cheese packing facility at Felinfach in Wales with the loss of 115 jobs, was under pressure last night to pay back a reported £1.2 million (€1.75m) it received in British public funds to help set up the business.

The co-op also announced yesterday that it plans to outsource its British cheese packing requirements to Kerrygold’s operation in Leek, Staffordshire.

Dairygold’s operation at Felinfach has a capacity of 1,000 tonnes of cheese per week. It is involved in packing the co-op’s branded cheese and other private contract packing.

Mark Williams (MP) said it was a devastating blow to employees, who had pulled out all the stops for the plant, and will have a huge impact on the area.

“Public funds have been used to enhance Dairygold’s work at the plant and I think there’s a strong case for this money to be paid back,” he said.

A Dairygold spokesman declined to comment on any grant aid details. The co-op said it will continue to sell cheese to retail markets in Britain and that a normal supply of products to customers will be maintained.

Dairygold Consumer Foods general manager Donal McCarthy said the co-op remains committed to the British cheese market, one of the most competitive in the world.

But in a market where there is massive overcapacity at present the Felinfach plant did not have the scale to achieve profitability.

Mr McCarthy said despite progress over the past year for the Felinfach facility, the volume throughput was not sufficient to reduce unit cost of production to a competitive position.

“Having carefully considered all options we determined that it is best for the Dairygold business in Britain to consolidate our packing requirements to a partner of sufficient scale to be competitive.

“Every effort has been made to make the Felifach plant viable but the realities of the market cannot be ignored. Our partnership with Kerrygold will significantly enhance our competitive position and should see us continue our strong growth in the British market.”