In the papers this week 5 – 11 Sept 2009

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Dublin Meath Growers (DMG) blames Tesco for its demise; Kraft get hostile over Cadbury; organic sales are up 13.2%

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10 September 2009 | 0

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Dublin Meath Growers (DMG), Ireland’s largest fruit and vegetable co-op, is blaming Tesco for its demise. It told the Oireachtas Joint Committee on Enterprise, Trade and Employment that Tesco withdrew its business just two months after the co-op opened a new €5 million facility to meet demand from the multiple.

DMG, whose employment dropped from 80 to just two or three voluntary members after Tesco pulled out earlier this year, claimed the multiple’s actions had left it with a outstanding bill of €600,000 to Irish growers. However, Tesco has responded that DMG had lost out legitimately to a competitor after the business was put out to tender among six companies.

Kraft launched a “hostile” takeover bid for Cadbury on Monday, after the UK chocolate maker rejected a £10.2bn (€11.7bn) bid. The Irish Independent has quoted Kraft as stating that together with Cadbury, it could create a "global powerhouse" with annual revenue of about $50bn. However, the UK confectioner has stated the bid "fundamentally undervalues" the company, and its shares have soared 38% since the news.

Kraft chief executive Irene Rosenfield has subsequently warned Cadbury would struggle to remain independent if it continues to spurn Kraft’s £10.2 billion (€11.7 billion) takeover, reports The Irish Times. “Given the complexity of the market and the global landscape, we believe it would be difficult for them to go it alone,” said Rosenberg. Meanwhile, following Kraft’s bid and subsequent expectations of further consolidations in the confectionery sector, Hershey has asked JP Morgan to assess its options.

Indeed, according to The Irish Independent, analysts have now speculated Cadbury may attract suitors ranging from Nestle SA to Hershey Co and sell for as much as $21bn (€14bn).

Artisan dairy producer Genilen Farm is aiming to increase sales by 10% this year, reports The Irish Times. The company has launched a new corporate identity to increase shelf space. “Because we don’t have a big advertising and marketing budget, shelf space is very important to us,” says commercial director Avril Twomey. The brand is currently stocked in over 200 independents, Dunnes and Tesco, and Twomey has praised Tesco’s central distribution for allowing it to increase its product availability.

Maxol, the leading petrol retailer has announced a £200 million deal with food wholesaler The Henderson Group, the company that owns Spar in Northern Ireland. The Newsletter reports the five-year deal involves 29 Maxol convenience stores being branded as Spar outlets, while Maxol will provide petroleum fuels to 13 service stations owned by the Henderson Group, to be re-branded with the distinctive Maxol blue and yellow forecourt image.

Diageo has rejected a Scottish government-backed proposal to counter its factory closure plans. The company is to close its Johnnie Walker bottling plant in Kilmarnock and the Port Dundas grain distillery in Glasgow, affecting 900 workers across the two sites. The Irish Examiner reports that despite a massive cross-party campaign, which saw 20,000 people march through Kilmarnock in a protest rally, the company insisted alternative proposals had not provided a "workable alternative to deliver what Diageo needs".

The Government must tell all local authorities to cut commercial rates by at least 20% to save businesses and jobs, says director of Retail Ireland, Torlach Denihan. BusinessWorld.ie reports Denihan has written to the Minister for the Environment, Heritage and Local Government, the Taoiseach and opposition leaders asking their councillors to vote for a reduction of at least 20% during the autumn vote.

The latest KBC Ireland/ ESRI consumer sentiment index shows consumers are not as fearful as they were during the summer of last year or the early part of this year, although there is little prospect of a sharp rebound. The index weakened to 48.7 in August, compared to 49.5 in July and an all-time low of 39.6 in July last year. The Irish Examiner states KBC economist Austin Hughes was surprised not to see “a much sharper deterioration in August given significant redundancies, major cutbacks in spending proposed by an Bord Snip, and controversy about NAMA.”

The volume of Irish organic food sales has increased year-on-year by 13.2%, according to new research released yesterday by Bord Bia. The Irish Examiner reports the TNS research also revealed 73% of Irish grocery shoppers purchased an organic product in the last month, compared to 20% in 2003 and 45% in 2008. A total of 73% of those surveyed said "not having added chemicals or pesticides" was the main benefit of buying organic food.

Former Heatons director Val Gannon, has opened the first branch of new discounter, 321 EuroStore, on Dublin’s Moore Street. The Sunday Tribune has reported that the brand which is linked to the AIM Cash and Carry in West Dublin, and also sells goods from German discounter Netto Marken-Discount, is planning to open up to four discount stores in Ireland.

The Showgrounds Shopping Centre which opens in Clonmel next month, will be the only shopping centre to open in Ireland this year, reports The Clonmel Nationalist. The centre is anchored by Marks & Spencer which opened ahead of schedule in June, with “one of its most successful store openings ever,” according to centre manager Julian Smith. Only 35% of visitors to the centre are local, with the remainder travelling from a broad catchment of 240,000 plus people within a 40 minute drive.

However, M&S has dropped plans to open a shop at the €350 million Opera Centre shopping mall, which is planned for Limerick. The Sunday Tribune quoted a M&S spokeswoman as stating the company doesn’t "comment on store speculation," yet two retail sources have confirmed this decision. M&S had also planned to open in the Crescent shopping centre in Limerick but An Bord Pleanála has turned down plans to expand that centre.

What’s more, Liam Carroll is not to recommence work on the €150 million Parkway shopping centre in Limerick until 2011 at the earliest. The Irish Examiner understands Tesco and Penneys have agreed to open in the centre.

Meanwhile, Real Estate Opportunities (REO), which is majority-owned by Johnny Ronan and Richard Barrett’s Treasury Holdings, has secured planning permission for a revamp of Stillorgan shopping centre in south Dublin.

 

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