C&C to shut last Tayto plant

Food and drinks group C&C plans to shed close to 100 jobs and contract out the manufacture of its Tayto crisps products to a competitor.

The Dublin and London-listed group said yesterday that it planned to close its remaining Tayto crisps plant in Coolock, in Dublin, and contract out production to Largo Foods, which produces competing brands such as Perri and Hunky Dory.

The move will result in the company making 98 production workers redundant.

It will keep another 166 jobs in Tayto, related to product development, sales, marketing and quality control.

C&C said yesterday that it would re-organise the sales operation and integrate it with that of its drinks business.

In a statement, the group estimated yesterday that the closure, redundancies and re-organisation would cost it €10 million in its 2005-06 financial year.

The group expects that the sale of the manufacturing and distribution properties used by Tayto will help offset this.

C&C added that it expected the changes to boost operating profits in its snack foods business from 2006-07.

The Irish Times understands that the Tayto business is profitable. However, the Coolock plant would have required an investment of €13.5 million to modernise it and ensure that the division remained competitive.

The move is further evidence of the pressure that the once-dominant Tayto is enduring in the Irish market since PepsiCo launched its Walkers brand here in 2001.

While Tayto is still the leading product in the market, with 40 per cent of all sales, PepsiCo has grown its share largely at the expense of the Irish brand.

Two years ago, C&C contracted out the manufacturing of Tayto snack foods from a facility in Terenure, Dublin, also to Largo, with the loss of 180 jobs.

C&C bought Tayto in 1999 for €86 million.

Tayto itself was founded by businessman "Spud" Murphy in 1954, in Dublin.

It grew from that point to become the undisputed leader in the Irish market.

Apart from Tayto, C&C owns some of the State's better known brands. It has the Club soft drinks, Bulmers cider and Ballygowan mineral water ranges of products.

It also distributes soft drinks for PepsiCo, which owns its chief competitor in the crisp market. The group floated last year.

Investors did not react immediately to C&C's announcement yesterday and the shares closed unchanged in Dublin at €3.65.