Farm Ireland
Independent.ie

Sunday 21 October 2018

Dale Farm facing £1m in losses after collapse of bakery firm

Dale Farm CEO Nick Whelan
Dale Farm CEO Nick Whelan

Margaret Canning

Dairy giant Dale Farm, flour firm Andrew's and an egg company face combined losses of nearly £1m following the collapse of McErlain's Bakery, the Belfast Telegraph can reveal.

The Co Derry company went into administration last month before being bought over by investor Paul Allen, best known as the head of Tayto Group, for £1.85m.

McErlain's is best known for supplying buns and bakery products to supermarkets like Marks & Spencer and Waitrose though it also produced its own range under Genesis Crafty.

The company was founded by husband and wife team Joe and Roberta McErlain 50 years ago.

Their six sons had been associated with the business - but now only managing director Brian McErlain remains with it.

Suppliers have been asked to continue trading with the company under its new owners although they have been told the new owners are not liable for the debts accrued before the administration.

Now a list of creditors seen by the Belfast Telegraph reveals the full financial hit to other companies in the Northern Ireland food industry after McErlain's collapse.

In total, the 200 unsecured creditors are owed £4.3m.

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An earlier report from administrators EY that was sent to creditors said the escalating cost of butter last year had been one factor in trading difficulties at McErlain's in Magherafelt.

Now the creditors' report shows that Dale Farm, which makes butter as well as other dairy products, is owed £641,052.91, while Andrew's Flour is out £212,230.36.

Ready Egg Products in Co Fermanagh, which supplies pasteurised egg products, is owed £170,000, while a smaller egg company in Maghera is owned £12,000.

A fruit company in Craigavon is owed £13,000.

None of the major companies affected wished to comment.

The remaining creditors are drawn from other industries, including a firm which provided temporary staff and is owed around £252,000.

A north Belfast car and lorry wash is owed just £10 but at around £641,000, the sum owed to Dale Farm is the largest.

It's understood the majority of firms in the list of creditors will be covered by credit insurance. But one insolvency expert said the list nonetheless presented an "horrendous picture".

Creditors are due to attend a meeting with administrators EY on October 1, when they are expected to be offered some form of payment deal. Shortly after the sale to Paul Allen's company Hatch Bros, McErlain's announced a recruitment drive to take on around 40 new staff. It already employs 260 people.

Speaking at the time of the sale, Brian McErlain said: "This is obviously a time of mixed emotions - sadness that it is now a different family who own the business, but hope for the future and the growth of the Genesis Crafty brand.

"Paul Allen's ability is very well respected in the business community, not just in Northern Ireland but further afield and I believe that his involvement will be a real benefit to the company.

"I'd like to pay tribute to all our staff, customers and suppliers, who have been through some difficul t times with us and whose support we have really appreciated."

It's understood more new jobs may be announced at McErlain's as production ramps up before Christmas.

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