Higher potato costs as a result of bad weather has resulted in a fall in operating income at the Beatrice Foods-owned Tayto crisps company even though sales rose by 7 per cent last year.

Beatrice has not broken out Tayto's figures from its own accounts, but industry analysts believe that Tayto had sales last year of well over £40 million with profits in excess of £10 million.

Beatrice said that Tayto continued to perform well in 1998 "turning in results which were ahead of the prior year in local currency terms." Sales were ahead although higher potato costs and increased costs in general meant that operating income dipped slightly. "For 1998 Tayto increased sales 7 per cent in local currency terms, helped by the strong showing of a new low-fat potato chip and higher sales of potato chips in general," said Beatrice in a statement.

There has been speculation since the middle of last year that Beatrice is planning to sell Tayto as part of a strategic review of its businesses carried out by investment bank Goldman Sachs.

But any plans by Beatrice to sell Tayto seem to have been put on the backburner and it is understood that no offer for sale has been circulated to potential buyers.

"We have received nothing and definitely have not received any invitation to bid," according to one source who said that he would have expected to be approached if Tayto is put up for sale.

Various potential buyers have been mentioned in connection with Tayto, notably Irish drinks group Cantrell & Cochrane, IAWS and Walkers Crisps, the British snack-foods arm of Pepsico.

Given its profitability, its huge presence in the marketplace and the name recognition of its main brands, industry analysts believe that Tayto would command a price tag of well over £100 million and possibly as high as £150 million.