The three companies which own the Spar franchise in the Republic and the Londis co-op chain are having talks on establishing a chilled and frozen foods distribution service, a service that would be shared between the various companies.
Yesterday, the Irish Distillers-owned BWG disclosed that it was involved in exploratory discussions with Mangans of Ennis, Punches of Cork and Londis on setting up a centre. But it stated there were no plans to set up a buying alliance involving the four groups.
BWG holds the Spar franchise in Leinster, Mangans has the franchise in Connacht and Punches in Munster. The three Spar franchisees and Londis are thought to account for less than 10 per cent of the Irish food market.
But this is the latest in a series of such moves within the food retail sector where the multiples are establishing centralised chilled/frozen centres with the aim of reducing distribution costs.
Distribution centres of this type are expensive and Musgrave, which operates the SuperValu and Centra franchised stores, is thought to have spent more than £20 million on two chilled centres in Dublin and Cork.
Tesco has also spent almost £9 million on a site near Dublin Airport where a £20 million centre is to be established while Dunnes Stores is thought to be planning a similar centre in Dublin.
