Bewleys is to close its bakery operations later this year, and has also raised significant doubts about the future of its two landmark Dublin cafés in Grafton Street and Westmoreland Street.
The closure of the bakery comes after the company failed to find a buyer for the north Dublin plant. The company said 44 people were employed at the bakery at Northern Cross on the Malahide Road and "every effort" would be made to redeploy them. Attempts to find a buyer or strategic partner had proven unsuccessful.
"The company is meeting with staff to discuss an orderly wind- down of the bakery by early summer," said a statement. Staff were informed when they finished their shifts yesterday evening.
"The craft bakery at Northern Cross, which is ancillary to the company's core beverage business, has been trading under difficult conditions for some time. The cost base has increased significantly, particularly raw materials - flour costs alone have risen over 20 per cent in the past two years.
"This combined with falling prices, increased competition from imported products and a loss of sales have all contributed to the difficulties at the bakery," said the company's statement.
Bewleys said several factors had also placed a "question" over the future of the cafés in Grafton Street and Westmoreland Street.
These included Luas roadworks, declining footfall and steep increases in rent, rates and insurance. Mr Jim Corbett, managing director of Bewleys, said the company wished to retain the cafés but only if customer needs could be met and commercial viability achieved.
"Bewleys cafés are not immune to the pressures which come to bear on city centre businesses in recent times and there will be a need for some radical changes, as well as significant capital investment if our two icon cafés are to remain," he said.
The company said its beverage business was going from strength to strength. "The wider Bewleys beverage business has been expanding with successes both in Ireland and abroad," said Mr Corbett.
The company refused to discuss what might happen to the cafés beyond what was contained in last night's statement. While they were subject to worries about potential closure in the 1980s, this is the starkest warning issued in recent times.
The company's previous managing director, Mr David Bunworth, in 2002 characterised the company as a "confused proposition" that must re-model itself as a forward looking and dynamic brand. The company has been basing its strategy on a five-year plan unveiled in early 2002.
According to accounts lodged with the Companies Office, the Campbell Bewley Group in 2002 made a pre-tax profit of €5.6 million, although after exceptionals this became a loss of €720,000. The exceptionals related to goodwill and redundancy costs. The company described 2002 as a very challenging year, especially because of world economic conditions.
A significant amount of the company's turnover now comes via the United States.
Bewleys is a name synonymous with the history of Dublin and the company has been associated with the arts since the days of James Joyce.
The cafés are well known for their stained glass windows and the Grafton Street café houses a small theatre.
Bewleys can trace its history back to 1835 when a man called Samuel Bewley and his son Charles imported 2,099 chests of tea directly from the Chinese province of Canton to Dublin.
Several hotels bearing the Bewley's name are not owned by the company.