A Wexford dairy products distributor would be wiped out overnight if Glanbia was allowed to cut its milk supplies unilaterally by thousands of litres, the High Court was told yesterday.

Mr Justice Kevin Cross granted Baínne Aláinn Ltd and its owner Shay Hayden, of Enniscorthy, an interim injunction restraining Glanbia from removing them from its distribution chain or restricting supplies from today.

Barrister Philip Sheahan told the court that, since 1991, Mr Hayden had spent €70,000 buying up several milk rounds in north Wexford and, in 2010, had spent another €85,000 in extending his business to take in private and commercial deliveries of Glanbia dairy products in and around Gorey.

“He has built up his business and goodwill and now faces that increased trade in Gorey being cut back by a third from the supply of 75,000 litres to 42,000 litres in breach of contracts he holds with Glanbia,” Mr Sheahan said.

Mr Hayden told the court that, since 1993, he had bought up milk rounds in Ferns, Kilrush, Bunclody and Camolin. Glanbia had bought over Premier Dairies around 1990 and a separate company, Wexford Creamery, had started in direct competition. He said it would have been impossible for his company to have bought rounds without Glanbia or their predecessors' contractual approval. His purchases had demanded significant capital outlay in the form of milk vans and staff and the development of the rounds.

With the passage of time all of his rounds were supplied by Glanbia. Contract business included the input of dairy products to shops and stores for which his company was paid a commission for handling and delivery. Baínne Aláinn also sold Glanbia products directly to private clients. He said buying the Gorey round had more than trebled his business which Glanbia, following its takeover of Wexford Creamery, now wanted to cut back by 30 per cent and transfer that business to the current Wexford Creamery agent.

On August 21st, he had been advised his Gorey round would be reduced in monetary terms by about €17,000 a year or €325 a week, while his more rural rounds would be increased by approximately €400 a week.

“That would fracture the efficiency of my business and would either wipe out profits or create a loss situation with the purchase of a larger delivery van and investment in more man hours,” Mr Hayden said.

He said Glanbia’s proposed action ignored the tight margins involved and the business model he had developed through time and money to make the enterprise successful.

Mr Hayden claimed that, overnight, his business would cease to be profitable due to what he described as amounting to “a flagrant breach of contract”.

He said his solicitor, Niamh Moriarty, had written to Glanbia about its proposals and had been told the company relied on a contractual clause which, it claimed, allowed it to introduce changes regarding product supplies.

The matter is due to return to court next week.