SHARES in Irish food companies have weakened as a result of negative sentiment towards beef and dairy products stocks, inspired by the BSE scare. However, the news from Britain late yesterday that the slaughtering of part of the national herd which had been anticipated is not to proceed came too late for markets in London and Dublin, and may provide some support for stocks today.

Kerry Group and Avonmore Foods both fell, although both have relatively small exposures to the beef processing sector in Ireland and Britain. Avonmore lost 4p to 138p, having dropped 13p late on Friday, while Kerry slipped 9p to 525p. Golden Vale, which reports today, ended 3p lower at 76p in a late deal.

The weakness in Kerry shares was attributed to the decision by Quinnsworth to remove some Denny products from its shelves because they include British beef. However, Kerry pointed out that beef processing accounted for less than 5 per cent of its business. Similarly beef exports to Britain account for only 8 per cent of Avonmore's operating profits.

The London share market was hit by worries that BSE will damage the British economy and boost the budget deficit. Shares fell sharply, with the Financial Times Stock Exchange 100 share index closing down 25.1 points at 3681.9p. Worst hit were milk stocks, which suffered from earlier fears that a slaughtering of a large part of the British milk herd would have a major impact on their supplies.

Northern Foods fell 16p to 183p, while Unigate dropped 30p to 407p. However, this was before the announcement at Westminster late yesterday. Irish companies Waterford Foods and Avonmore have large milk operations in Britain and would thus be affected by any upheaval.