SPECULATION over the future of Glanbia's beef and sheep processing operations in the Republic has intensified following the retirement of the chief executive of the group's meat division, Mr Eddie Power. Mr Power (52) has run Glanbia's meat operations for the past 11 years.

For months there has been speculation that the management of the beef and sheepmeat operations has been attempting to put together a management buyout. There is a belief that the incoming group chief executive, Mr Ned Sullivan, who takes over at the end of this month, believes the lower margin beef and sheepmeat operations are not appropriate to an international foods group focused on dairy products and food ingredients and higher value pigmeat consumer products.

Concentrating all its resources on higher-margin and more value-added activities would help to improve Glanbia's rating on the stock market, where its shares trade on a discount to major European dairy companies, although the shares do trade broadly on a par with the British dairy groups, say analysts in Dublin.

The departure of Mr Power and the fact that his replacement as head of the meat operations, Mr John Madden, has not been appointed to the main Glanbia board will inevitably fuel speculation that red meat does not figure in Mr Sullivan's long-term plans for Glanbia.

Glanbia - like many in the red meat industry - has struggled to generate a reasonable return from an industry where margins have traditionally been very low, often as low as 1 per cent.

While there has been some speculation that the slump in earnings from pigmeat in the first half of 1998 might lead to pigmeat being sold off as well, it is understood the pigmeat operations had a much better second half last year and that the first-half problems were exceptional. In that first half, the pigmeat industry throughout Europe suffered from huge oversupply with a consequent effect on prices.

Mr Power's departure is the latest in a series of moves since the completion of the merger between Avonmore and Waterford that created Glanbia. Group chief executive Mr Pat O'Neill is retiring at the end of this month, 15 months earlier than had been originally planned, while deputy chief executive Mr Matt Walsh who was chief executive of Waterford Foods until the merger, retired in January.

At sub-board level, corporate development manager Mr Gerry Hoey is retiring in May while another departure is Mr Denis O'Connor, who headed the Golden Foods mozzarella operation in Britain before returning to a strategic development position in Glanbia's consumer foods division in the Republic.