Wednesday 21 November 2018

Ready meal firm set to close with the loss of 169 jobs

'Ms Justice Caroline Costello was told the liquidators had not sought any power to continue trading - and the order sought was to ensure an orderly wind down' (stock photo)
'Ms Justice Caroline Costello was told the liquidators had not sought any power to continue trading - and the order sought was to ensure an orderly wind down' (stock photo)

Tim Healy

An Irish firm in The Authentic Food Group company, employing 169 people, is to close.

The UK-based Authentic Food Group Ltd was granted permission to appoint joint provisional liquidators to Dundalk-based TAFC Manufacturing Ireland Ltd.

Ms Justice Caroline Costello was told the liquidators had not sought any power to continue trading - and the order sought was to ensure an orderly wind down.

"Unfortunately, there does not appear to be any alternative", Rossa Fanning SC, for the company, told the judge.

The company produces frozen ready meals and since it was set up in 2014 has had just one profit-making year in 2016-17 when it made €400,000.

Projected losses for year end 2019 are €2.6m and the parent company is no longer prepared to support it, the company's petition to the court states.

TAFC acquired the business and assets of the Kraft Heinz facility in Dundalk in 2014.

Other companies within the group, in the UK and Germany, had reached capacity with a need to increase production and outsource. Dundalk fulfilled overflow orders placed with the UK.

As of this month, the company owes €3.2m to its UK sister and €4.6m to the parent.

Among the difficulties it faced were with a new project with the retailer Iceland in 2015, which highlighted the inflexibility and limitations of the Dundalk facility.

Then, last February, the UK sister company was told a co-packing agreement with Kraft Heinz was to be terminated in February 2019.

In addition to all this, the TAFC owed nearly €500,000 in water rates and despite regular payments to help pay off those arrears, on October 15 last, it was threatened with water disconnection. It also owed €500,000 in gas and electricity charges.

The parent has told TAFC it could no longer continue to fund its ongoing losses.

Ms Justice Costello appointed joint provisional liquidators. The case comes back on November 12.

Irish Independent

Business Newsletter

Read the leading stories from the world of Business.

Also in Business