Kepak acquisition of Silvercrest puts firm in driving seat to win back lucrative contract with Burger King
Published 24/04/2013 | 05:00
Kepak could be in line to win back the lucrative Burger King contract following the company's purchase of the troubled Silvercrest beef burger plant from ABP.
In an announcement last week, ABP confirmed that it had taken a "strategic decision" to exit the frozen burger market and sell the Ballybay, Co Monaghan plant to the Kepak Group.
While the final details of the purchase have yet to be sorted out, and it is subject to Competition Authority approval, the sale will put Kepak in pole position to win back the €40m Burger King contract.
There has been no confirmation from either party regarding the contract, but talk within the industry suggested that Burger King would be open to sourcing beef for their burger business from Ireland once more. The fast food giant is currently using French and Italian beef.
Silvercrest became embroiled in the horsemeat scandal after tests carried out by the Food Safety Authority of Ireland found that a burger produced at the plant contained 29pc horsemeat.
Production at Silvercrest was suspended soon after the results of the tests were made public in January. In the weeks that followed the company lost supply contracts worth up to €60m with Burger King, Tesco and Aldi. It is understood that the 122 staff currently employed at Silvercrest, who have been retained on full pay while the future of the plant was resolved, will transfer to Kepak.
Commenting on the deal, Paul Finnerty, chief executive of ABP Food Group, said: "Our decision to sell the Ballybay facility allows the (ABP) group to move forward positively with our core chilled beef business and other developing businesses."
Mr Finnerty maintained that ABP's chilled business had been "unaffected by the horsemeat issue".
Industry sources suggested that Kepak were likely to rebrand the Slivercrest operation should the purchase get the green light from the Competition Authority. The company had a turnover in excess of €100m and processed close to 20,000t of beef, producing own-label frozen burgers for the main British supermarket chains, as well as some Irish discounters.
"If Kepak can win back these contracts, Silvercrest could prove a very lucrative business," one beef industry source said.
The move will also confirm Kepak as the third largest operator in the Irish beef scene, after ABP and Dawn.