Nestle to sell off non-core products

Some of the Irish grocery trade's household names have been put on the market by Nestlé as part of a major restructuring of its Irish and British operations by the Swiss food giant.

Nestlé Ireland has decided to focus its attention on core brands such as Nescafé and KitKat. As a result, the group is looking to sell its factory in Tallaght as well as ambient brands such as Chef sauces and Fruitfield jams and confectionery brands such as Silvermints, Double Centres, Scots Clan and Yorkshire Toffee.

The Irish business is being sold as part of a unit that includes British brands such as Crosse & Blackwell sauces, Gale's jam, Sarsons vinegar and Sun-Pat. Nestlé Ireland's managing director Mr Eddie Humphries said UBS Warburg had been given the brief of finding a single buyer, but added that splitting the businesses had not been excluded.

Mr Humphries said the Irish business had sales last year of €25.4 million (£20 million) and accounted for about 13 per cent of Nestlé Ireland's total sales.

He declined to reveal the profitability of the businesses for sale or the price tag that Nestlé had put on them.

Mr Humphries said the proposed sale was part of the group's strategy of concentrating on a smaller number of core global brands such as Nescafé and KitKat.

"Focus is becoming more important. We have an abundance of brands but now we intend to focus on our global brands and on emerging businesses in the chilled distribution and food service sectors."

Of Nestlé's current staff of 310, 132 will transfer to the group's new location at Citywest outside Dublin, while 178 employees will remain with the factory and brands that are for sale.

Nestlé's chocolate crumb manufacturing plant in Mallow, Co Cork, which employs 58 people, is not affected by the restructuring.

Mr Humphries described the sale of the Irish operations as an "excellent opportunity for an existing or new entrant to the Irish market". But industry sources were less convinced that it would be easy to fund a buyer for the Irish and British business as a single unit.

"What's for sale is a very diversified range of brands, and some companies might be interested in some of the brands and not in others.

"Other potential buyers might be interested in just the Irish or British operations.

"It's hard to think of too many potential buyers for all of what's been put on the market. There could be a financial buyer who might buy the business and then split it up, or maybe the Irish and British management might try and put together a MBO," said one source.

Sources said a company like Greencore might be interested in the sauce brands on the market, while other Irish groups with consumer foods businesses such as DCC, IAWS and C&C might also be interested in parts of the business.

Nestlé also announced yesterday that it had bought Northern Foods' Ski and Munch Bunch chilled brands and manufacturing plant in Britain for £145 million sterling (€234 million).