Consumers lose taste for bacon and pork as food group Kepak diversifies into chicken
FOOD companies Kepak and Oliver Carty have said that traditional pork and bacon sales in Ireland are declining, with little room for growth.
In a submission to the Competition and Consumer Protection Commission (CCPC) the parties said one of the main reasons for the gloomy outlook is “consumers switching to healthier alternatives, such as chicken and turkey in particular.”
The submission was made in relation to a joint venture they formed for the acquisition of Greene Farm Foods, one of the country’s largest chicken meat producers.
The company produces cooked sliced and pulled chicken, cooked turkey and beef and cooked chicken wings. It is not involved in the processing of pork products.
Kepak Group’s main business is the primary processing and marketing of meat products while Oliver Carty is a secondary processor of pork and bacon.
“Kepak has a strategic interest in diversifying its product range and in expanding the range of branded products produced by the Kepak Group,” read the submission.
“Oliver Carty have been looking to diversify the product range and expand into cooked sliced meats,” it added. “Kepak has no tradition of cooked sliced meats and the Kepak Group believes that a joint venture with Oliver Carty will combine the technical expertise of Oliver Carty with the commercial reach and brand marketing capability of Kepak Group.”
Documents published by the competition watchdog show that there were two ways in which the deal would progress.
The first was a share acquisition whereby the joint venture, known as Kepcar, would acquire 90pc of the share capital and 10pc would be held by an unnamed party.
The second way was by an asset acquisition “to be implemented pursuant to an agreement between Kepcar/Greene Farm Fine Food Limited and the Receiver to be appointed by Ulster Bank whereby Kepcar would acquire the entire business and assets of the Target (Greene), including all of the assets necessary for the continuation of the manufacture, distribution and supply of products”.
Last month, Michael McAteer of Grant Thornton was appointed receiver over certain assets of Green Farm Foods Ltd, which traded as Greene Farm Foods, by Ulster Bank.
Greene Farm Foods was started by Kenneth Greene in 1991 and posted turnover of €28.1m and a €310,000 profit for 2015.