Food group Heinz, maker of the eponymous tomato ketchup, has said a decline in its non-branded frozen food business contributed to a €27.5 million drop in sales at its main Irish unit last year.
HJ Heinz Co (Ireland) reveals in newly-filed accounts that its revenues were down 17 per cent at €132.7 million in the 12 months to April 22nd last year, but the company took the benefit of an improvement in profit margins. At €23.5 million, pre-tax profits were down 7 per cent.
The company is the main unit responsible for the sale, marketing and distribution in the Republic and Northern Ireland of all Heinz food, one of the world's best-known brands. It owns popular products such as Heinz baked beans, spaghetti hoops and salad cream, as well as the WeightWatchers label, HP Sauce and Lea & Perrins.
A spokesman said "some softness" in demand for non-branded frozen food was a factor in the loss of revenues in Ireland. Such products are sold to third-party suppliers who sell them under private label brands.
Core Heinz brands, such as its ketchup, continue to perform well in the Irish market, he said.
He also said the disposal of the John West seafood business had an impact on revenues.
Heinz sold John West in March 2006, only weeks before the end of the Irish unit's fiscal year. But under a transitional agreement, Heinz in Ireland continued to act as sales agent for the seafood label.
The accounts say that a restructuring of the Irish business last April led to the sales, marketing and distribution of its frozen product range transferring to another affiliate. The frozen food division has a manufacturing operation in Dundalk, Co Louth.
"The grocery trade continues to be a highly competitive market with a number of strong indigenous and international brands. The grocery retailer set is highly concentrated with the three main players - Tesco, Dunnes and Musgrave SuperValu - accounting for in excess of 70 per cent of the total market," the accounts say.
"The commercial environment is expected to remain highly competitive in the year ahead with further retailer share consolidation and pressures, from both food and non-food categories, on the availability of space in store. However, with a continuing focus on product quality and relevant innovation to meet changing consumer needs, we remain confident that the business will be further developed in the future."
The company did not pay out a dividend to its parent last year or in the previous fiscal year. A net profit of €20.77 million helped reverse a deficit of €2.11 million in the profit-and-loss account.
The Irish business had €19.15 million in shareholders' funds at year-end. After coming under pressure last year from rebel shareholders, its parent in Pittsburgh stepped up efforts to deliver productivity improvements in its global supply chain.
While the parent organisation has increased its expenditure on marketing and innovation, its marketing spend in Ireland fell back to €1.33 million in the most recent year from €1.42 million.
