Failure to get venture capital support has forced fruit distributor Fyffes to put the development of its worldoffruit.com portal for the international fresh produce industry on hold.

In a brief statement yesterday, Fyffes said that worldoffruit.com is scaling back its activities and expenditure on the portal would be well below that envisaged when it was launched at the beginning of last year. Fyffes has spent €15 million (£11.8 million) on the development of worldoffruit.com, whose main product is the fruitXchange Internet trading operation. Half of the portal's 20 staff have lost their jobs as a result of the scaleback.

Fyffes benefited from the dot.com frenzy when worldoffruit.com was introduced. With the attitude towards dot.com companies gone full circle, Fyffes cannot find venture capital support for the business. In early 2000, Fyffes had discussions with venture capitalists about funding worldoffruit.com's developments but decided against this sort of funding because the venture capitalists were looking for too big a stake in the portal. Last March, Fyffes company secretary Mr Philip Halpenny said that a Nasdaq flotation was the most likely financing option and that it would take $100 million to develop the operation.

After spending €15 million, Fyffes has decided to reduce expenditure to a level "not expected to be material in a group context".

When worldofruit.com was introduced, it boosted Fyffes share price threefold to an alltime high of €3.98. One of Fyffes' longest-standing shareholders, DCC, sold its 10 per cent cent shareholding at a huge profit. Most of those shares were bought by British institutions, which saw the value of their investment fall to a low of €0.67 before Fyffes' recent recovery to more than €1.00 a share.

The collapse in Fyffes shares is also the result of a badly received profits warning and the general downturn in the fresh produce industry. In recent weeks, the McCann family have gone into the market and bought more than seven million Fyffes shares at prices of up to €1.00. Yesterday, the announcement that worldoffruit.com's development has been frozen helped the Fyffes shares gain €0.06 to €1.08.

Investor sentiment towards the stocks remains negative, but there is some relief that Fyffes has halted spending on worldoffruit.com.