It’s good to know there’s a great local store just around the cornerMusgrave supports more than 3,200 stores in Ireland, the UK and Spain.

Together with our retail partners we are Ireland’s second largest employer with more than 35,000 employees

It means great value on my doorstep

I can drop in on my way back from work

Supporting my local retailer supports local jobs

Local retailers understand local needs

Local retailers support local suppliers

It can help me reduce my carbon footprint

www.musgravegroup.com

Londis – GB only; Mace – Northern Ireland only

In this months issue

February-March 2010

Global companies have worn a path to advertising agencies inNew York and their counterparts in London, but the market ischanging.

2 NEWS

10 MARKETING IRISH AD AGENCIES ABROAD

14 NEWS

20 NEWS FEATURE - GROOMED TO BE IRISH

Despite the recession, Irish men are spending more than everon personal grooming.

M.D/Editor: Frank MaddenDeputy Editor: Ruth TimminsBsn. Dev. Managers: Niall P. Madden

Sarah GriffinContributors: Emma Maguire

Tomas O’BrianCirculation: Margaret CorryDesign: 90% Proof

Todays Grocery Magazine Tel 2809466 (6 lines)The Mews email: info@todaysgrocery.comEden Road Upper editorial@todaysgrocery.comDun LaoghaireCo. Dublin www.todaysgrocery.com

Small PrintTodays Grocery Magazine is circulated to all proprietors, directors and managers of allrelevant manufacturers and distributors, to every cash and carry, every multiplesupermarket, group head office and wholesaler, all group affiliated shops and Londis outletsin addition to over 6,300 unaffiliated independent retailers and the country’s leading off-licence outlets. All articles are copyright of Todays Grocery Magazine and cannot bereprinted without the written permission of the editor. All letters to the editor of thismagazine will be treated as having been submitted for publication. The magazine reservesthe right to edit and abridge them.Disclaimer While every effort has been taken to ensure that all information is accurate atthe time of going to press, neither TGM Ltd or Todays Grocery Magazine acceptresponsibility for any inaccuracies or omissions. Please note that the opinions expressed inthe articles are strictly those of the authors.

The Londis Group severed relationships with more than 40stores last year as it reviewed its credit risk because of theeconomic downturn.

Learning more about your business customer profitability bycarrying out detailed analysis will be more beneficial thanknee-jerk cost cutting.

30 EU RULING CAUSES CONCERN

34 DO YOU KNOW YOUR BUSINESS?

12 NEWS - BARRY GROUP TO OPEN 12 NEW OUTLETS

16 LONDIS DOWNSIZES

18 NEWS FEATURE - €150M “SHRINKAGE”

22 DUNNES STORES CHALLENGE PLASTIC BAG LEVY

Dunnes Stores has secured leave from the High Court tochallenge the validity of the plastic bag levy.

24 NEWS

28 MUSGRAVE RESTRUCTURES

In “extremely difficult market” conditions the Musgrave retailgroup is to shed 143 jobs in Galway.

36 ARYZTA ERRS ON SIDE OF CAUTION

Despite its recent good results there is little optimism aboutfuture growth for the food group, Aryzta.

40 BWG AT FOREFRONT OF CONVENIENCE RETAILING

N E W S

2 TGm

It will be interesting tosee how the Love Irish Foodmarketing initiative, whichwas launched by severalhome-based food and drinkcompanies as anindependent entity, willwork out over the comingmonths.

The multimillion-europromotion was launchedamid a big fanfare, followedby a not-insignificantcontroversy over its logo.

It is said to be thebiggest campaign ever of itskind in Ireland and involvesa website, a dedicated PRcampaign and aheavyweight media andmarketing push around thenew brand in a bid tochange consumer attitudesand buying behaviour. Theaim, its organisers contend,is to safeguard the future ofIreland’s food industry.

After all the fuss aboutTesco’s new policy onshelving Irish brands, someof the biggest grocerymarketers in Ireland feltthey could stomach nomore. While GuaranteedIrish has tried to do itsutmost to highlight theneed for consumer supportfor Irish goods, a combinedeffort, with handsome fundsto match, was a surer bet.Love Irish Offd (LIF) issupported by some of thebiggest names in Irish food.

Avonmore, Barry’s Tea,Batchelors, Flahavan’s,Odlums and Tayto areamong the indigenousbrands supporting theinitiative. It has also gainedsupport from Britishcompanies Cadbury andBritvic (which producesBallygowan and ClubOrange, among others).

Relative minnows likeCully & Sully, Glenisk andShellfish de la Mer are in onthe act too. Yet some largeIrish food groups arenoticeable by their absence,not least Kerry Foods,whose brands includeDenny, Cheestrings andFreshways.

Colin Gordon, chiefexecutive of GlanbiaConsumer Foods, alongwith Jim Power, economistsaid research ahd shownthat consumers were eagerto support Irish brands.

Not alone that, but theyrecognised that thissupport for Irish brandscould have implications forjobs and the widereconomy. Irish Farmers’Assocation boss PadraigWalshe was at pains topoint out that the Irishfood industry employed300,000 people from farmto plate, and accounted forover half of exports fromIrish owned producers.Last year, Irish food anddrink exports netted

€8.2bn.Whether or not LIF can

convince shoppers to buyIrish is another thing.

Guaranteed Irish couldfreely lobby Irish consumersuntil the EU cried stop in1984, saying that itcontravened the ethos ofthe union by encouragingpreferential treatment in anopen market.

So Guaranteed Irishbecame a limited company,relying on members’subscriptions.

Ireland in 2009 is notdissimilar from therecession-torn country of1975, which GuaranteedIrish was first mooted anddisposable income wasrationed. But consumershave experienced fargreater affluence anddeveloped cosmopolitantastes in food and drinkwhich could hardly havebeen anticipated back inthe mid-70s.

Much has been made byLIF of the emphasisconsumers put ondistinctive branding whenshopping. Its researchshowed that 84 per cent ofrespondents believe thereshould be a symbol thatclearly differentiates Irishbrands - in other words,products made in Ireland,using Irish ingredients andproviding jobs.

Will consumers fall for Love Irish Food?

M&S plan rejectedAn Bord Pleanala has

told Marks & Spencer itcannot build a 2-storeyextension to the rear of itsstore in The Jervis Centreon Mary Street, Dublin 1because if could interferewith the operation of theLuas. This decisionoverturns an earlier one byDublin City Council toapprove the developmentsubject to over 20 planningconditions.

M&S wanted to developthe building as part of awider plan to expand andrevamp its store. It wantedto demolish a two-storestructure to the rear of thestore and build a 10-storeyretail, commercial andresidential scheme frontingUpper Abbey Street andLiffey Street.

This would haveprovided an extension tothe ground and first floorlevel retail space locatedmainly in the six-storeyMary Street building withseven floors of 42apartments above.

TGM

February-March 2010 3

Consumers are payingover the odds for theirgroceries becausemultinational retailers aremaking up to three timesthe profits in the Irishmarket as they doelsewhere, according to anew report.

Retailers are behavingunethicially by using theirmarket power to imposeunfair conditions onsuppliers, the report by theOireachtas Committee onEnterprise, Trade andEmployment claims.

Demands by retailersfor “hello money” and othersecret payments fromsuppliers are “commonpractice”, the report states.Suppliers are frequentlyrequired to make paymentsand provide services“considered to be outsideacceptable business

practice”.The report, backed by

committtee members fromall the main parties, callsfor the introduction of astatutory code of practice toensure fairness in thegrocery sector as well as asystem for measurecompliance with the code.

David Byrne, formerattorney general, wasappointed as a facilitator byTanaiste Mary Coughlan, inthe development of thecode of practice. However,Ms Coughlan’s intentionwas to iintroduce a volunarycode to begin with.Legislation currently beingprepared to merge theNational Consumer Agencyand the CompetitionAuthority would then bealtered to include a specificprovision allowing for theintroduction of a statutory

code. This might not beintroduced if the sectormanaged to agree on theprinciples of a voluntarycode.

Byrne is expected toreport back in threeemonths, after which it willbe up to the new Minister,Batt O’Keeffe, to decidehow to proceed.

The committee’s reportalso calls on the industry toagree a method by whichthe profit figures of retailersand suppliers, as well asother relevant data, couldbe put into the publicdomain. It was drawn up inresponse to claims by manyIrish prdoucers andsuppliers that they arebeing subjected to unfairdemands by big retailersfighting a price war. Fiftysuppliers were approachedto participate but ony seven

agreed, even thoughanonymity was guaranteed.No retailers were contactedduring the compilation ofthe report.

“The report clearlyhighlights thedisproportionate marketpower that large retailersretain in the irish retailmarket and thedisadvantages that thisplaces suppliers and otherretailers in, when seeking toconduct their business,”said committee chairmanWillie Penrose.

Retailers, some of whomhave already appearedbefore the committee, areexpected to be invited toreturn to answer furtherquestions and give theirresponse to the report.

Suppliers whoparticipated in theresearchh claimed pricesare still much higher inIreland than elsewhere.They put this down to ourlower pouplation densityand the retailers’“insatiable” appetite formargin. Ireland is regardedas a “massive profit centre”for retaiilers who seeconsumers here as an idealopportunity to make“superlative” profits, it isclaimed.

One supplier said theretailers’ margin on hisproduct was 32-35 per centin the UK, but 45-50 percent in the Republic.

MEPs have rejectedproposals for colour-codedwarnings on packaging as ameans of warningincreasingly obeseconsumers of the dangerslurking in the food theyconsume.

However, mandatory

country-of-origin labellingfor chicken and fish moveda step closer following thecommittee vote by MEPsrecently.

Members of theEuropean Parliament’spublic health and foodsafety committee also voted

to introduce labellingshowing whether free-rangeor battery eggs were used.

The defeat of proposalsfor a “traffic light” system isseen as a victory for bigfood companies whichlobbied vigorously againstit.

Irish retailersmaking far bigger profits

Food warning labels ruled out by EU

4 TGm

Glanbia has enterednegotiations with theGlanbia Co-operativeSociety, its 54 per centshareholder, about the saleof the comppany’s Irishdairy and agri businesses tothe co-operative.

If the deal is passed, thefood conglomerate’s dairyprocessing, consumerproducts andagribusinesses in Irelandwill be 100 per cent ownedby the co-operative.

Glanbia’s Irish propertybusinesses and related jointventures in Ireland wouldalso be included in the sale.

While the companydeclined to give anyindication of a possiblevaluation figure for the Irishdairy business - whichrepresents approximately50 per cent of thecompany’s revenue stream -it is likely that the co-operative will fund thetakeover through the sale ofa pecntage of itsshareholding in the publiclimited company.

Such a co-operativemove would involve a“significant reduction theSociety’s ownership in thegroup”, according toGlanbia. Analysts estimatethat this would involve atleast 35 per cent of thecompany coming on to themarket.

Credit Suisse is advisingGlanbia on the transactionwhile KPMG CorporateFinance is acting for the co-perative.

It iis expected that anagreement may be reachedin the coming weeks, with adeal closed by the end ofthe second quarter.

Irish owned fuel supplierTopaz expects to generatean operating profit of over€20 million for the year tothe end of March 2010.

This will mark asignificant turn-around forthe business over fiscal2009, when it slipped intothe red following a €17million hit relating tovolatile oil prices and amajor investment inrebranding its servicestations.

Accounts filed with thecompanies office showTopaz made an operating

loss of €500,000 in theyear to the end of March2009. This compared with asurplus of €28.6 million inthe previous 12 months.

Ireland’s biggest fuelgroup made interestpayments of €19.1 millionon its debt last year, whichwas offset by interestreceived of just over €1million.

N E W S

Low-cost supermarketchain Aldi has beengranted permission to builda branch on thePortmarnock coast,opposite one of Dublin’smost popular beaches.

Fingal County Councilgranted permission for thesupermarket in the groundsof the White Sands Hotelon the Strand Roadopposite the PortmarnockMartello Tower and beach,despite having recievedmore than 50 objections tothe plan.

The supermarket andoff-licence development willhave a75-space car park,and will involve demotion ofsome hotel buildings.

Objections centre onthe effect the developmentwould have on one ofDublin’s best beachesknown as the “velvetstrand” and on the increasein traffic, particularly insummer months.

Local PortmarnockLabour Councillor PeterCoyle said he believed thedecision was made in errorbased on a “colouringmistake” on the countydevelopment plan. Prior to2005, the area was zonedas residential. However, thiswas seen as unfairlylimiting to the hotel whichhad been on the site since

the 1930s.To allow the hotel to

build complementaryfacilities such as a leisurecentre or a swimming pool,the councillors decided toinclude a provision in the2005 development plan togive the hotel lands theirown zoning. This zoningwas included as a “localobjective” to “retain theprimary use of hotel on thissite”. However, the colourused in the developmentplan map to indicate thenew zoning was the sameas that used to indicatesuburban centre zoning.

Aid “picked up on thecolour”, Coyle said andmade their application onthis basis. “The countymanager should haveintervened and it is verydisappointing that hedidn’t.”

Coyle said he hadappealed to countymanager David O’Connorto become directlyinvolved: “I am now goingto appeal the council’sdecision to An Bordpleanala and I will seek anoral hearing.”

A spokesperson forFingal Country Council saidthe council does notcomment on individualplanning applications ordecisions.

Glanbia in talks on sale

Aldi branch near Martello Tower

Topaz expect€20m op profit

6 TGm

Coca-Cola is suing abusinessman oversubstantial losses allegedlysuffered over his failure tohonour a contract of May2008 to buy 9.3 acres oflands near Tuam, CoGalway, for €6 million.

The lands are nowvalued at €1.4 million,Coca-Cola BottlingCompany (Dublin) Ltdclaims.

Mr. Justice Peter Kellyfound John McCann hadadvanced an arguabledefence against thecompany’s claims whichrequired the case go to afull plenary hearing anddisentitled the company tosummary judgement. Coca-Cola had argued there wasno arguable defence.

Mr. McCann,Crossmaglen, Co Armagh,alleges he cannot performthe contract due to thecompany’s own conduct. Heclaims the company, for itsown business reasons,breached an agreementwith him to lease premiseson the site for its drinksdistribution business andhad since ceaseddistributeion from the site,where it had been based for30 years. This, combinedwith the economicdownturn and a fall it thevalue of the site, resulted in

his bank refusing inDecember 2008 to financethe project further, heclaims.

He claims the May2008 contract was toinvolve the sale to him ofthe lands on which thecompany’s drinksdistribution warehouse wassituated and he was tobuild a new warehouse tobe leased back to thecompany at a rent of€280,000 annually, withupward-only rent reviewsevery five years.

An agreement to thateffect was to have beenexecuted without delay buta draft agreement was notgiven to his solicitor untilDecember 2008 and thiswas not detailed, he claims.In the interim, Coca-ColaIreland had reviewed itsbusiness arrangements andhe was informed inSeptember 2008 thecompany’s new managingdirector had asked it tohold any progress on theTuam depot until he had afull understandiing of theplan for the business acrossIreland.

Coca-Cola laterdiscontinued its distributionbusiness and he understoodit now engages contractorsto carry on that business.

Workers get €2.5million

Coca-Cola sues over land deal

Around €2.5 million inunpaid wages wasrecovered last year forworkers who were found tohave been paid less thantheir statutory minimumentitlements followinginvestigations by theNational EmploymentRights Authority (NERA).

In its report for 2009,NERA said over 6,000workers received moneyback on foot of itsinvestigations, with €410being received on averageper employee.

The report showed thatin the catering sector only21 per cent of employersinspected by NERA werefound to be compliant withindustrial relations andothere legislation governing

pay and conditions.Following inspectiions byNERA, more than€736,000 was recoveredfor workers in the sector.

The report said therewas a compliance rate of27 per cent in the hotelsector, 28 per cent in theretail grocery area and 27per cent in electricalcontracting.

Around 7 per cent ofemployees inspected werefound to be in breach of thenational minimum wagelegislation. As a result ofsuch inspections, nearly€200,000 was recoveredfor workers.

However, it alsoemerged that the numberof inspectiors available toNERA to police suchlegislation is falling as aresult of cutbacks and theGovernment’s moratoriumon recruitment.

NERA director GerDeering said there werenow 69 inspectors workingthe in agency, down from80 in 2008.

Food company Dennywas confirmed as instigatorof the Walsh Family series,a poular series of comicwebisodes performed bythe five-person Dublincomedy act Diet of Worms.

Denny commissionedthe series, which looks at afamily in the 1980s and1990s through successive‘home moves’.

It’s a further deparure

from the norm for a brandthat, untl about a year ago,relied mainly onconventional advertising.

“We wanted to bringpeople a fun taste of home,so we supported the Diet ofWorms in their humorouspresentation of the WalshFamily,” said Tricia Burke,marketing manager ofDenny.

Denny’s ‘web-isodes’

N E W S

Full range of convenience fuel productsClean and convenient to useNational Advertising and PR campaignFree merchandising Units available

Full range of convenience fuel productsClean and convenient to useNational Advertising and PR campaignFree merchandising Units available

The Instant Winter Fuel Range

from

The Instant Winter Fuel Range

from

8 TGm

N E W S

About 166 new foodand drink productsdeveloped by Irishcompanies were unveiled ata major Bord Bia marketingevent.

The food board brought300 internatioanl foodbuyers and 100 Irishpurchasers to Croke Parkfor a series of 2,400 pre-arranged business meetingswith Irish companies toboost food and drink sales.

The meetings were heldon the same basis as“speed dating” which hasproved a very satisfactorymethod of introducingbuyers and sellers atprevious events organised

by the food board.Aidan Cotter, chief

executive of Bord Bia, saidthe event offered overseasand domestic buyers aunique opportunity toexplore the capability,quality and export capacityof the Irish food and drinkindustry using a highly time-efficient formula.

“Over 150 dynamic,established and emergingIrish companies will in turnbe exposed to key buyersfrom the retail and foodservice sectors form AcrossEurope, the US and Asia,”he said.

There has been an

intensive build up to theevent involving Bord Biastaff working with the Irishcompanies through trainingworkshops and seminars onbroadening export reach,maximising sales pitchesand analysing new markets.

Through its network ofnine overseas offices, BordBia has briefed theoverseas buyers, withitineraries tailored to eachof their requiremnets.

It said thiscomprehensive approachguaranteed a moreproductive and worhtwhileevent as each of th ebuyerswould meet the mostrelevant potential suppliers.

During their time inDublin buyers were able totake part in guided storevisits, enjoy Irish food anddrink tastings.

In some cases they willundertake site visits toparticular companies.

The event, which is partof the food board’s majormarketing drive, comes at acritical time for the foodand drink industry whichhas been badly hit.

The value of the irishfood and drink exports fellby 12 per cent last year, orby just under €1 billion, tostand at €7.12 billion.

Bord Bia’s stagesmajormarketing event

Dairy processors tomeet challenges

PR company contract defended

The leader of the Irishdairy processing industryhave undertaken tocontinue meeting under theaegis of the Irish co-operative movement to tryto resolve the challengesfacing the sector.

Icos- the irish Co-operative OrganisationSociety - has beenattempting to have theorganisations work bettertogether in sharingprocessing facilities, milkcollection systems and tocut out duplication in thesystem.

At their last meting, thechairmen and chiefexecutives of all the milkprocessors in the Stateagreed to continue theirdiscussion on closer co-operation.

The industry focused onhow to cope with anexpected increase in milkoutput from farms when theEU ends its milk quotasystem in 2015.

The quota system limitsthe volume of milk a farmeris allowed to produce, andwhen it ends Irish farmersare best placed in Europeto expand to meet theexpected surge in demand

for dairy products globally.However, Irish

creameries are now runningat near full opeartingcapacity during the peakspring summer season butat off-peak times operatesat only 60 per cent of thenational capacity.”The dairyprocessiing industry iscurrently undercapitalised,and over the past twoseasons, loss-making. Thisundermines the industry’sability to fund anynecessary expansion frommargin,” said Jon Tyrrell, adirector general of Icos.

The Deparmtnet ofEnterprise, Trade andEmployment has defendedthe handling of a publicrelations contract for theNational Consumer Agency.

A spokeswoman for thedepartment said thetendering process for thecontract was conducted “inaccordance with all of thenormal procedures. Thoseprocedures were followedrigorously and they won itin the same way as anyother organisation couldhave won it”. She was

commenting on a claim byFine Gael’s Leo Varadkarthat scarce cash was beingfrittered away by the body.

Varadkar called onTanaiste and Minister forEnterprise Mary Coughlanto investigate reports thatthe consumer agency hadbeen paying €18,000 onaverage a month to publicrelations company Q4 sinceMay 2007. The agency willbe merged with theCompetition Authority laterthis year.

10 TGm

Until now, global companies haveworn a path to the door ofadvertising and marketing companieson Madison Avenue in New York andtheir counterparts in London, but themarket is changing.

Tom Holmes, a veteran of Saatchi& Saatchi and other majoradvertising players, is working torefashion the industry. The ideabehind his company, Creativebrief, issimple. Using its website, companieswith contracts to fill post their detailsonline and inspect the work ofadvertising agencies that might beable to carry out the job.

“Major companies increasinglywant to take their business out of themajor centres. They know creativetalent is everywhere. This allows thesmallest agency to perform at thesame level as the latest industry

player,” he says.So far, Creativebrief has put

€550 million worth of businessthrough its books on behalf of clientssuch as Tate & Lyle, Diageo etc.

Russian Standard Vodka - thesecond-biggest advertising spenderin the UK - used Creativebrief when itwas planning a television, cinemaand print campaign for the UK,though this contract did go to aLondon agency.

Too often in the past, majorcompanies went down pathspreviosuly travelled when they hadadvertising and marketing contractsto fill.”They often don’t know whereto look; they are too busy to keep in

touch with everything that ishappening,” sayd Holmes. Hebelieves the changing trends offermajor opportunities for Irishadvertising and marketing companiesto cast their net into wider anddeeper ponds.

“There are huge opportunities forthem to get involved,” he says. “Weput everyone on a level playing field.We don’t vet the agencies’ work. Thebrands can look at that forthemselves, but we put everyone onthe same plane.”

Creative industries contributeStg£65 billion a year to the UK’sgross domestic product, while theirIrish counterparts - which includethose working in cultural bodies, aswell as the more commercial side ofcreativity - produce about €11billion.

Five or six years ago, advertisingand marketing agencies in Dublinand Belfast were not interested in co-operatiing with each other, let alonelooking beyond their shores forbusiness, according to Holmes.

“I want to inject a bit ofconfidence into the system: that theycan look over the parapet, and weare getting the brands to look aswell,” he says, adding “Irish agenciescompare really well with theircounterparts elsewhere.”

McCann Erickson managingdirector Orlaith Blaney said clevermarketing was more necessary thanever, and urged Irish companies andexecutives in the UK to considerusing Irish creative talent in their

campaigns.Creativebrief charges agencies

between Stg£2,500 and Stg£4,500a year. For this fee, agencies can postsamples of their work online,showing the final work that theyproduce and how it came about.

“What we do is entirely unique,”says Creativebrief managing directorPaul Duncanson, a veteran of theadvertising business.

“Agencies have long complainedabout the cost of putting togetherpitches. It can cost up toStg£100,000.

“If I am a client and I don’t reallyknow what I am looking for, myfriends will know a few agencies andI’ll ask them to pitch, without everseeing what else is out there.”

With Creativebrief, the approachis different. “Brands can have a lookat what is out there, see who is doinginteresting stuff and then puttogether a list of people to gofurther,” says Duncanson.

Major brands will, in the future,spend more money to promote theirbusiness. “Private equity firms willhave to understand brands. Before itused to be about holding on to acompany for three years and thenflogging it. Now it has to be built,”says Holmes.

“More companies are going to berestructured, given the economicclimate that is around, and that isgoing to require advertising andmarketing.

And Ireland is well placed tocapture some of it.”

Marketing Irish Ad Agencies abroad

M A R K E T I N G I R I S H A D A G E N C I E S

The smallestagencycan perform atthe same levelas the largestindustry player

“

12 TGm

Barry Group, the Cork-based whole fooddistributor, will open up to12 new budget outletsbefore the end of the yearunder the discount brand,Buy Lo.

The company launchedthe brand las August andalready operates two BuyLo stores in Ashbourne, CoMeath, and in Tralee, CoKerry.

Jim Barry, managingdirector of the Barry Group,said the group was in activenegotiations with franchiseholders to open five newBuy Low stores by mid-yearand between five and sevenmore by the end ofDecember.

The company has justannounced plans to invest€1.5 million in theexpansion of its centraldistribution hub in Mallow,with the creation of 25jobs. Due for completion inJune 2010, the project willadd 20,000 square feet tothe existing 125,000square foot hub, completinga €10 million overhaul ofthe facility dating back fouryears.

Barry said investment inthe facility would alsosupport the company’s off-licence business, followingthe acquisition of the CarryOut chain of 50 off-licencesin December.

It will see Bary’srelocate warehousing anddistribution for Carry Out,currently located in Corkcity, to one centralised hubfor all of the group’sactivities.

“Right now, we operatefrom two warehouses, whichisn’t sustainable from anefficiency and capacityfront,” Barry said.

“As our business modeldevelops it is strategic tooperate from one centraldistribution network so thisexpansion will consolidatethe operations into onecentral warehouse based in

our Mallow HQ in Co Cork.”Barry Group employs

249 staff and suppliesproducts to more than 700stores around the country,including 244 affiliatedstores in the Republic of

Ireland, operating underthe Buy Lo, Costcutter,Carry Out and Quik Pickbrands.

It also has a wholesalebusiness serving pubs,caterers, hotels and shops.

Barry Group to open 12 new outlets

N E W S

TGM

February-March 2010 13

14 TGm

Queries from individualshoping to open a new foodbusiness increased by 50per cent last year, the FoodSafety Authority of Irelandsaid.

The rise may reflect thedownturn in the economyas people look for newbusiness opportunities,authority chief executiveProf Alan Reilly said.

The increase in newbusiness inquiries to the

authority’s advice line alsoshowed that people wantedto set up a food business inthe correct manner, he said.

The organisationlaunched a guide to foodlaw for artisan and smallfood producers who hadstarted or planned to starta new bsuiness.

The guide covers thelegal requirements neededfor operating a foodbusiness, including safety,

traceabillity, training,hygiene, packaging andadditives.

This wil allow newmembers of the foodindustry to be “self-sufficient in setting up theirfood business is the correctway”, said Reilly.

However, one of thebiggest problems for localproducers is the variation ininterpretation of these lawsby environmental healthofficers in different HSEareas, said Ruth Hegarty ofEuro-toques Ireland, agroup which promotes useof local producers’ productsby chefs, “What is requiredof producers in Cork can bedifferent from producers inMeath, so things are oftennot very clear,” she said.

The amount of legalrequirements for foodproducers was putting offnew people from starting afood busiiness or holdingpeople back fromexpanding because of thelevel of investment needed,she said.

New food business on the increase

N E W S

Retailers seek closer co-operationRetail industry group

retail Excellence Ireland(REI) has named a numberof institutional landlordsfrom whom it is requesting“closer co-operation” on theissue of rent.

REI said it wasappealing ot the landlordsto “engage in meaningfuldiscussion with theirtenants”.

The institutions it isseeking engagment with areAIB Investment Managers,Canada Life Assurance, IrishLife Assurance, TreasuryHoldings, BallymoreProperties, Chartered Land,Eircom Superannuation

Fund, HarcourtDevelopments, HowardEuroscape, Shipton GroupCork and Lexeme RetailProperty Group.

It also listed AvivaLondon, which is thelandlord at the Liffey ValleyShopping Centre in Dublin’Alvonway Investments, alandlord at the WiltonShopping Centre in Cork;Clancourt Managementwhich owns properties inthe Crescent ShoppingCentre in Limerick and GVREstates ManagementService, a landlord at theFairgreen Shoping Centre inCarlow.

The industry bodyclaimed many of itsmembers had “proved theirfinancial distress” byopening their accounts totheir landlords, but in somecases this had been metwith “an unwillingness” toreduce rents.

The right investmentcan help you beat pricerises in everything from oilto tea.

Consumers are beingstung by price rises oneverything from energy tofood, but those in the knoware hedging their costs withsavvy investment choices.

Motorists face higherprices in the coming weeks,according to theAutomobile AssociationIreland, average petrolprices hit €1.28 a litre inMarch with diesel at€1.18. This is despite oiltrading at $80 (€59) abarrel - almost half the $57peak reached in July 2008.

Fuel giants blame thenew carbon tax and therising price of wholesalepetroleum, which is up17% since the end ofJanuary. The weak euro hasalso forced up costsbecause oil is bought indollars.

Meanwhile,householders are receivingweighty fuel bills after thecoldest winter in 30 years.

Soaring global demandfor food and fallingsuppliers are pushing upthe prices of “softcommodities” such ascoffee and wheat - inJanuary, for example,bananas were 22% moreexpensive than at the startof 2009, while the price oftea had risen 4%.

Hedge yourbets

Queries from individualshoping to open a new foodbusiness increased by 5 percent last year, the FoodSafety Authority of Irelandhas said.

The rise may reflect thedownturn in the economyas people look for newbusiness opportunities,authority chief executiveProf Alan Reilly said.

The increase in newbusiness inquiries to theauthority’s advice line alsoshowed that people wantedto set up a food business inthe correct manner, he said.

The organisation haslaunched a guide to foodlaw for artisan and smallfood producers who hadstarted or planned to starta new business.

The guide covers thelegal requirementes needed

for operating a foodbusiness, including safety,traceabillity, training,hygiene, packaging andadditives.

It will allow newmembers of the foodindustry to be “self-sufficient in setting up theirfood business in the correctway”, said Reily.

However, one of thebiggest problems for localproducers is the variationby environmental healthofficers in different HSEareas, said Ruth Hegarty ofEuro-toques Ireland, agroup which promotes useof local producers’ productsby chefs, “What is requiredof produceres in Cork canbe different from producersin Meath, so things areoften not very clear,” shesaid.

Guide launched for smallproducers

Applegreen profits fall

The Applegreen chain ofpetrol stations recorded asharp rise in revenues lastyear, but profits fell as thedownturn took its toll onconsumer spending.

Petrogas, the firmbehind Applegreen, hadsales of €309 million in2009, up from €239million in 2008. However,after-tax profits fell by 36per cent, from €4.7 milliionto €3 million. The companysaid this was as a result oftighter margins and fallingconsumer spending.Petrogas reported earningsbefore interest, tax,depreciation andamortisation - whichreflects the company’soperating performance - of€9 million in 2009. This

was down from €10.1million for the previousyear.

However, the firm said itwas optimistic about anincrease in profitability thisyear. It has implementedinitiatives aimed atreducing supplier costs andoverheads.

Petrogas wasestablished in 1992, and isowned by chief executiveBob Etchingham andcompany director JoeBarrett. The companylaunched the Applegreenbrand in 2005. Unlike mostpetrol retailers, Petrogaseither owns or has a long-term lease on all of itslocations. It then licencesout certain locations toindividual operators.

The big supermarketdemands for money fromsuppliers to display food ontheir shelves was “like thekind of thing you expect tosee in the Sopranos,”Labour Party leader EamonGilmore has said.

He described thepractice as “outrageousextortion” when headdressed a conference onthe future of the CommonAgricultural Policy inTipperary.

“In relation toagriculture and food, thefree market can be good forconsumers and for farmers.But left to do what it

pleases, it can be bad forboth,” he said.

“Take the outrageousextortion of the bigmultiples in thesupermarket business.Powerful dominant playersare extorting huge sums ofmoney from Irish suppliersin exchange for theprivilege of getting theirfood on to supermarketshelves,”

“It is bad for suppliersincluding farmers whocannot get their produceonto the shelves of majorsupermarkets. It is bad forconsumers whose choice isreduced. It must stop.”

‘Outrageous’ says Gilmore

February-March 2010 15

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Britain’s biggest retailers cut their prices by half thisEaster in a desperate attempt to persuade consumers tospend amid rotten holiday weather. The savage discountingraised fears of a painful election run-up for retailers.Growing nervousness about tax rises, combined with thewintry weather, have put many families off spending,denting retailers’ sales and profit margins. Retail sales haveappeared to bounce back in recent weeks. Analysts areexpecting good news from Marks & Spencer after shoppersrushed out to buy coats andknitwear during the winter freeze.Rose, however, is predicted to painta cautious picture about consumerspending for the rest of this year.

UK retailers slash prices

16 TGm

The Londis Group severedrelationships with more than 40 storeslast year, as it reviewed its credit riskbecause of the economic downturn.

Stephen O’Riordan, chief executiveof ADM Londis, said the group had cut

credit lines to “exposed stores”, wherethere was a risk it would not be paidfor products. The move was a majorfactor in a 21 per cent fall in revenuesat the group last year, he said.

Following the credit review, thereare now just over 300 Londis shopsaround the country, down from 350stores a year ago.

The group had wholesale turnover -made up of sales from the group tothe individual Londis shops - of €269million last year, down by 21 per centfrom €341 million in 2008.

Despite the falling sales, the groupremained profitable with a pre-taxprofit of €2.4 million, compared witha profit of €4.1 million in 2008.

O’Riordan said he was pleasedwith the “resilient” results, given thepoor economic environment.

He said that sales were down by10 per cent on a like-for-like basis,with the remaining 11 per cent dropaccounted for by the lower number of

stores in the group.O’Riordan said the credit review

focused on stores “where there may bedebt issues,” such as stores that hadborrowed heavily for property duringthe boom years. “We felt that a sale

where you’re not getting paid for thegoods is just not worth it,” he said.

A “cost review” led to a 15 per centcut in costs across the group, while tenpeople lost their jobs at the group’scentral office, bringing staff numbersthere to 70. O’Riordan said that thegroup’s shop owners had seen first-hand the effects of the recession.

“There has been price deflation onfood of about 8 per cent. Consumerspending is down, people are shoppingaround and all retailers have tocompete on price. There was apremium being paid for convenience,but that is gone now,” he said.

The downturn has also taken itstoll on the value of shares in thegroup, which is structured as a privateplc and owned by the shop owners.The shares were valued at more than€85 each two years ago, but are nowworth €51.67.

“This peaked in 2008, when allother shares peaked. The share price

is important, but capital value is notthe main driver for our retailers,” saidO’Riordan. The shareholders will get adividend of about €1,500 each for2009, which is half the 2008 figure.

O’Riordan said that he expected

sales at the group to be flat this year,which would be a “satisfactory” result.

It is seeing the benefits of astrategic alliance with Nisa Today’s, aBritish wholesaler, from which it issourcing an increasing range ofproducts at better prices.

“The deal has given us access tomore than €6 billion of buyer power,and has helped our retailers tocompete toe-to-toe withh the largermultiples,” said O’Riordan.

He said that the group may dipinto its €23 million in retained profitsto acquire a wholesale business,although there is no specific deal inthe pipeline.

“We would very much like toacquire a business that is the right fit.It is a limited market but, in arecession, opportunities do arise andyou have to be alert to thoseopportunities,” he said.

L O N D I S D O W N S I Z E S

LONDIS DOWNSIZES

Stephen O’Riordan

February-March 2010 17

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Shoplifting is costing Irishsupermarkets an estimated€150 million a year andpushing prices up forconsumers, a retailingconference has heard.

Globally, the retail industryloses an estimated $278 millioneach year - or 1.65 per cent ofturnover - because of“shrinkage”, defined as internaland external theft and stockmismanagement.

According to Adrian Beck, acriminologist at the Universityof Leicester retailers tended toblame the problem onexternal theft, when thisaccounted for only one-thirdof the Irish shrinkage costof €450 million.

“Shrinkage is alwaysbeing blamed onoutsiders. In SouthCarolina, theyblame girl

gangs, the Finns blame theRussians, and the British blameeast Europeans. But these areoften urban myths and the rootsof the problem lie in thebusiness itself,” he said.

Stealing was “all aboutopportunity” and was best dealtwith by prevention throughbetter design, better staffingand better procedures. Whilesurveillance of staff had a roleto play in cutting lossesthrough theft, too oftenbusinesses relied onelectronictechnology as acrutch, hesaid. Awell-

motivatedstaff was usuallythe best protection againsttheft.

It was important to imposesanctions on shoplifters, butretailers would never be able tocatch every one and it wasbetter to “Design out” theft.

The quality of fresh food isnow the biggest factorinfluencing whereconsumers shop.

Consumers also perceived thatthe value of fresh food hadimproved the most of anyfood category in the pastyear. Retailers whichfall down onproviding freshfood are

“goosed”.Over 42

per cent ofshoppers said they

planned to buy moreGuaranteed Irish goods

over the next year, and largenumbers also said they wouldbuy more fresh foods, and FairTrade and low-fat products.More say they will be bringingsandwiches to work andentertaining at home.

One in four consumers saidthey shopped in NorthernIreland last year but the figuresvaried from 32 per cent inDublin to 35 per cent inConnacht/Ulster to just 3percent in Munster. Toiletries,detergents and alcohol were theproducts people were mostlikely to buy on cross-Bordershopping trips.

€150m “shrinkage”TGM

February-March 2010 19

20 TGm

Despite the recession, Irish menare spending more than ever onpersonal grooming.

According to new research fromUniversity of Aberdeen, more andmore women are choosing feminine

men over their more rugged andmasculine counterparts. So, it’s a caseof in with Orlando Bloom and out withArnie, as the changing face ofmasculinity continues.

Some of the reasons given for the

rise in demand for the woman’s manare improvements in healthcare and ageneral increase in male grooming. Sixout of 10 women now prefer morefeminine men, the report found.

The results suggests that ashealthcare improves, more masculinemen fall out of favour. That could bewhy feminine-lookng move stars likeJohnny Depp and Orlando Bloom arepopular now compared with the likesof Sean Connery in the past.

While the recession has hit manyhigh-end cosmetic and groomingoutlets aimed at women, from nailbars to tanning studios, the share ofthe male market in grooming andcosmetics has increased.

Irish men are now morecomfortable buying skincare productsand the range and availability ofmoisturisers and facial creams for menhas expanded significantly.

But while males in Dublin may beupfront and open about theirgrooming habits, across the rest of thecountry are Irish men okay to movebeyond a bar of soap and a splash ofaftershave?

One of the companies benefitingfrom the broadening of Irishmasculinity is L’Oreal, which has anextended range of products for mennow available everywhere fromsupermarkets to chemists. Some of itsproducts include a ‘hyrdra-energy eyecare roll on’ designed to eliminatedark circles and eye bags under men’seyes.

As a sign of its growing confidencein a receptive male audience for itsproducts, L’Oreal last year became onefo the sponsors of the Irish rugbyteam.

“The male market is relativelysmall at the moment, but we expect tobe significantly bigger in the future”says Louise Horgan of L’Oreal Ireland.

“We are also convinced there willbe a big male market in correctivecosmetics, but that is further down theroad. We’re now selling insupermarkets and the products havespecific areas of the store apart fromthe female sections.”

GROOMED TO BE IRISH

G R O O M E D T O B E I R I S H

22 TGm

Dunnes Stores hassecured leave from the HighCourt to challenge thevalidity of the plastic baglevy.

It is seeking adeclaration that theregulations imposing thetax are invalid in a casethat could have generalimplications.

The Dunnes caseinvolves a €36.4 million billserved on it for allegeduncollected and duepayments arising from thelevy.

The company isdisputing the RevenueCommissioneres’ taxassessments of Novemberlast, covering a four-yearperiod, on groundsincluding that the definitionof plastic bag in the 2001regulations is “so uncertain”as to render the regulationsinvalid.

Dunnes claims the levyrelates to larger bags givento customers at point ofsale to hold their shoppingbut the assessmentswrongly include other bagsfor wrapping or hygienepurposes.

The regulations, Dunnesalleges, are invalid becausethey are not for therecovery of “waste” asdefined by the WasteManagement Act.

The company claims aplastic bag provided to acustomer of a supermarket,service station or othersales outlet does notconstitutte waste and doesnot become waste until theholder discards it or formsan intention to discard it.

Counsel for Dunnes saidthe company has alwaysbeen and remains a strongsupporter of the plastic baglevy but it strongly disputes

the tax assessments.Dunnes is seeking

orders quashingassessments made underthe Wast Management(Environmental Levy PlasticBag) Regulations of 2001.

It is also seekingdeclarations including that

the 2001 regulationsimplementing the plasticbag levy are invalid and ofno legal effect.

Counsel for Dunnes saidthat dunnes did not acceptthe November assessmentsas it contended the plasticbags in relation to which

those assessments weremade “were not subject tothe levy”.

The plastic bags inquesion were used in thecompany’s stores in NortherIreland and also used forother purposes.

Dunnes Stores challenge plastic bag levyMargaret Heffernan

D U N N E S C H A L L E N G E B A G L E V Y

24 TGm

Retailers are chargingconsumers up to five timesthe prices paid to farmersfor basic foodstuffs,according to a new reportpublished by the IrishFarmers Association (IFA).

A farmer gets just 2 percent of the retail price ofcheese, 33 per cent of theprice of milk, and 36 percent of the price of potatoesdespite the fact that theybear the largest proportionof the costs involved.

Over the past 15 years,the farmer’s share of theretail prices has declinedsignificantly, the reportsays; from 51 per cent to27 per cent for pig meat,for example, and from 60per cent to 50 per cent forbeef.

The report notes thatmany of the productssurveyed require onlyminimal packaging withlittle or no processing, andnormally spend no morethan a few days onsupermarket shelves. Whileindividual shares of pricesfor wholesalers and

retailers are not brokendown, the report sayspowerful retailers are in thestrongets bargainingposition within the foodsupply chain.

The IFA says a collapsein farm incomes hasseriously jeopardised theability of farmers too

maintain output.It claims aggressive

competition for marketshare by retailers isundermining the pricereceived by farmers to thepoint where thesustainability of family farmproduction is in jeopardy.

“The large retail groups

in Ireland and across theEU through their buyingpower are forcing down theprices paid to foodsuppliers to totallyunsustainable levels, yettheir food businessesremain very profitable”.

The tiny mainland subpost office at Roonagh Pier,near Louisburgh, Co Mayo,closed at the weekend,having provided a lifelinefor Clare islanders for 130years.

Over the decades, fourgenerations of the seafaringisland family the O’Gradyshave in storms and swells,hail and sleet, sunshine andfog, transported love lettersand epistles, notes andcards, parcels and packagesto the from the windsweptlittle post office.

Coincidentially, three

generations of the Scottfamily, stretching back to1879, have administeredthe office, which was oncealso a telelphone exchangeand used to dispatch geeseand turkeys by post.

“Today is a strange dayat Roonagh. I feel sad thepost office is closing. Youknow, the Scotts were likean extentiion of our family,”said septuagenarian Chris

Brady, as he disembarkedfrom his sons’ ferry theClew Bay Queen.

For over 60 yearsretired island hotelier andferry company owner,O’Grady has collected anddelivered the post at theremote post office.

“When I look back now, Idon’t know how I survivedlanding in this spot, saidChris, flinging the postbag

over his shoulder. Just likehis grandfather, Austin, andfather, Michael, before him,Chris has often risked lifeand limb landing at thevolatile little harbour,renowned for its ragingswells.

The proposedcomputerisation of thecountry’s netwoork of postoffices expedited 85-year-old Margaret Scott’sretirement. The mother ofeight took over aspostmistress after herhusband Dick retired in1969.

Shops charge five times price paid to farmers

Post office closes after 130 years of service

N E W S

Greencore has signalleda further move away from itsIrish business and anincreasing focus on the UKand US convenience foodmarkets with theannouncement that it is tosell its malt business toFrench co-operative AxerealUnion De CooperativesAgricoles in a deal worth upto €116.25 million.

The disposal, which hadbeen flagged, will net theIrish-listed company €112million upon completiion,subject to a €5 millionreduction for net debt andabout €5.6 million to fund apension deficit at its UKpension scheme.

In addition, the companywill receive a deferred cashconsideration of €1.25million on the firstanniversary of completionand cash consideration of upto €3 million depending onearnings.

The group said it woulduse the sale proceeds to

reduce its borrowings. Itsmalt division comprisesthree malt businesses basedin Britain, Ireland and

Belgium. It said that lands atAthy, Co Kildare, which wereheld by the Irish maltdivision, Minch Mart, would

not be included in the sale..A spokesman for Axereal

said the French co-op fullyintended to continue theIrish malt operation. DavidWilkes, the current head ofGreencore Malt, will assumethe role of deputy chiefexecutiive of Antwerp-basedBoormalt Group, thesubsidiary of Axereal whichbought the malt business.

Patrick Coveney, chiefexecutive said the Irishbusiness wuld generate€100 to €150 million inrevenues this year,representing about 10 percent of the company’s overallrevenue. About 60 to 65 percent of the groups revenueswre generated by its UKbusiness, with the remainderdivided between itsEuropean and US markets.

Coveney and Greencorechairman Ned Sullivanstressed the increasingimportance of the US marketto Greencore’s strategy.

Greencore sells malt business

N E W S

26 TGm

An Irish bio-techcompany which is 50 percent owned by NUIMaynooth is to enter theUS market with the launchof an innovative foodadditive product whichtackles disease andpremature death in theworld’s bee population - amajor issue affecting foodproduction in the US.

Bemune was formed asa spin-out company fromNUI Maynooth, where aresearch team has beendeveloping the product formore than two years.

It is hoped that theproduct, in the final stagesof trials, will be launched onthe international market

within six months. Thecompany is in talks with aUS firm about marketing it.

Beemune intends tobuild a Research andDevelopment centre inIreland over the next threeyears, which will potentiallycreate up to 30manufacturing jobs.

Disease and death inbees is the second biggestthreat to crops after climatechange according to the USDepartment Agriculture.Commercially managedhoneybees- vital toproduction of up to 40 percent of all fruit andvegetables - have sufferedincreasing ill health inrecent years. This is due to

factors including colonycollapse disorder, whichwiped out almost two-thirdsof the global commercialbee population in 2007.

There were over 20million commercial beecolonies worldwide thatcould benefit from theproduct.

BEMUNE saves the day!

Patrick Coveney

Eason is to acquriethe former Hughes &Hughes outlets at Dublinand Cork airports.

The company hasnegotiated a new five-year licencearrangement for theoutlets with the DublinAirport Authority andwill take over therunning of five shops inDublin and two in Cork.

The m.d. of Eason,Conor Whelan, said he

was pleased that anindigenous brand suchas Eason would beoperating in such high-profile locations asDublin and Corkairports.

Whelan would notdiscuss the terms of thelicences with theAuthority other than tosay that the parties wereable to negotiate termsthat were mutuallysatisfactory.

Eason has 54 outletsincluding 16 franchisesand while it owns anumber of properties itrents others. Includingthe staff at the airportoutlets, Eason nowempoys 1,700 people.

Bank secures ruling over egg firmBank of Ireland has

secured judgement forsome €7.9 milliion againsta Co Galway man who isfacing trial in Britain inconnection with an allegedmultimillion euro fraudinvolving eggs being falselypassed on to Britishconsumer as free-rangeorganic eggs.

A €7.9 millionjudgement against PearsePiggott, and is wife NoelleBallyglennon, Gort wasissued. The judgementorders were not contested.

The British authoritieslast year sought the

extradition of Mr. Piggott,who runs egg-distributionfirm Pearse Piggott & Sons,over his allegedinvolvement in a fraudbetween 2004 and 2007where eggs from cagedhens were passed off toBritish consumers as beingfree-range or organic.

Piggott, who has deniedthe charges against himincluding conspiracy todefraud, consented to hisextradition.

It is alleged thatproduction numbers of eggswere altered, the names ofthe suppliers were incorrect

and the fraud netted aprofit of Stg£1.59 million.

In its action BoI claimedsummary judgement arisingfrom loans advanced to thecouple between February2006 and November 2007to restructure existingloans, purchase a pub andadjoining investmentproperty and to invest incertain residential andindustrial property.

The bank learned frommedia reports on June 11ththat year that the Britishrevenue was seeking theextradition of Mr. Piggottover his alleged

involvement in an egg fraudand later told thedefendants they had 21days to arrange payment oftheir loans.

When propsals were notmade concerningrepayments, it issuedletters in August 2009demanding immediaterepayment.

Mr. Piggott in Octoberput without prejudiceproposals to the bank andpayments of some€12,000 were also made.

February-March 2010 27

TGM

Harcourt redevelop GSCProperty firm Harcourt

Developments has been given the go-ahead from An Bord Pleanala for a€200 million redevelopment of theGalway shopping Centre. Harcourtwhich is controlled by businessman

Pat Doherty, has been attemptingto secure planning permission for adevelopment of the site on HeadfordRoad for almost five years.

The firm plans to build an 85,00square metre mixed-use developmentin four blocks. The development willbe carried ut in phases over five years

Eason to take over H&H outlets

The Musgrave retail group is to shed143 jobs in Galway as part of arestructuring of its distirbution network.

The company has said that“extremely difficult market” conditionshad influenced its decision to close itsGalway depot on the Tuan Road at theend of June.

About 70 full-time and part-timestaff will lose their jobs, while 55 staffhave been given the option ot transferto Musgrave’s distribution depot inKilcock, Co Kildare.

A cash and carry outlet in Galwaywill not be affected by the move,according to Musgrave Retail PartnersIreland (MRPI).

MRPI and partners, SuperValu andCentra, said that the market contractedby 7 per cent last year.

The company also said it initiatedprice reductions worth €235 million in

an effort to compete with price cuts inmajor chains and to combat the impactof cross-Border shopping.

MRPI will still employ 1,550 staff,once Galway is closed with depots inCork, Dublin and Kildare.

The SuperValu and Centra networkof shops employs a further 30,000staff.

Donal Horgan, managing DirectorMRPI said taht a 3o-day consultationperiod would begin with staff and tradeunions.

An outplacement programme wouldbe put in place where transfer was notan option for those offered the choice,Horgan said.

“This is a difficult time for all ourcolleagues on this site and our focus willbe in assisting them as much as wecan,” he said.

28 TGm

MUSGRAVE RESTRUCTURES

Chris Martin

Donal Horgan

M U S G R A V E R E S T R U C T U R E S

TGM

February-March 2010 29

30 TGm

Anti-smoking group AshIreland has called on theGovernment to increasetaxes on cigarettes after theEuropean Court of Justiceruled that Irish legislationwhich empowers theGoverrnment to fix aminimum price forcigarettes violatesEuropean law.

In a judgement handeddown, the court foundIreland had breached adirective which sets downrules governing thecalculatiion of excise dutyon tobacco products.

The case dates backseveral years, a period inwhich requests by theEuropean Commission forinformation from Dublinsomtimes went unheeded.In its ruling, theLuxembourg-based courtsaid Ireland breached itslegal obligations underEuropean law by failing toprovide data on thelegisation to Brussels.

The case arose fromproceedings that theEuropean Commission tookagainst Ireland, France andAustria. The commission

argued that legislation in allthree countries underminedfree competition bycurtailing the freedom ofmanufacturers andimporters to determine themaximum retail sellingprices of their products.

Ireland maintained thatthere was no prohibition on

the imposition of minimumprices and argued that thesystem of minimum priceswas justified underEuropean law by theobjective of protectinghealth and human life.

In addition, Irelandargued that a tax increasecould not guarantee“sufficiently high” tobaccoprices “because thatincrease could be absorbedby producers or importersby sacrificing part of theirprofit margins, or even byselling at a loss”.

The Department ofHealth said it wasexamining the implicationsof the European Court ofJustice ruling, but said the“floor” price was introducedto deter people fromsmoking and discourageyoung people from takingup the habit.

Ash spokeswoman DrAngie Brown said she wasextremely concerned by the

ruling and called on theGovernment to ensureprices were kept high.

“Ireland has and ispermitted to have aseparate tax regime to allother EU countries and it isour view that theGovernment has every rightto apply taxes whichensures that tobacco is soldat current and even higherprices.”

The ruling waswelcomed by tobaccocompany PJ Carroll whichsaid the minimum priceshad become irrelevantbecause of illegal sales.

“Packs of cigarettes arebeing purchased up anddown the country for aslittle as €3.50 on the blackmarket.”

Rival company JohnPlayer said the rullingwould have no impactbecause of illegal cut-pricestreet sales.

EU ruling causes concern at below-cost selling

C O N C E R N A T B E L O W - C O S T S E L L I N G

32 TGm

Fruit importers Fyffesshook off higher costs andunfavourable currencyexchange movements toachieve a 33 per cent risein pretax profits in 2009.

But the company haswarned of difficult tradingconditions in the first twomonths of 2010 and itrevised down its earningsexpecations for the yearahead.

Fyffes chairman DavidMcCann described the2009 figure as “a strongresult” and the best sincechanges to Europeanbanana import regulationswere introduced in 2005.

“The group achieved the

necessary increases inselling prices to offset thenegative impact of highercosts and adverse exchangerates,” he said.

McCann said tradingconditions had beendifficult in 2010 as a resultof the imapct of prolongedperiod of cold weather ondemand and pricing, whilethe strengthening of the USdollar had also had anadverse effect.

The Fyffes chairmansaid it was “appropriate andprudent” for the companyto revise the group’s targetsfor 2010. It now expectsadjusted earnigs before taxand write-offs to be in the

range of €14-€18 million -its original target for 2009.

The target is conditionalon the group securing

selling price increases forits produts across all of itsmarkets.

N E W S

Fyffes profits up

NIB PREDICT CATCH UPRetailers in Ireland are

frequently accused ofmispricing their multi-packor bigger-sized products tocreate the impression thatthey are better value whenthe truth is that theyactually cost more.

Sonme examples of thisare “A two-pack of O’Hara’sMadeira cake sells for €4and is labelled as a ‘greatvalue pack’. That’s fine, buta single pack of the samecake is €1.99, which wouldmake two boughtseparately 2 cent cheaper.

If it seems as if this isexcessively picky - after allit is only 2 cent - then readon.

Complaining about anextra 2 cent for a ‘greatvalue’ pack although validmay seem petty, until youcheck the weights. Thesingle pack contains onecake which weighs 350gand the ‘great value’ packcontains two cakes whichweigh 330g each - total of660g. If priced at the sameunit price as the single

pack, the ‘great value’ packshould sell for €3.75, not€4. So,the multiple makean extra 25 cent, or over 6per cent on every ‘greatvalue’ pack!.

That wasn’t all that wasspotted. Kellogg’s RiceKirspies, 450g, selling for€2.50 while 600g of thesame cereal cost €3.45.Lets say you buy one 450gpack a week for four weeks,it will cost €10, or youcould buy three largerpacks, which will weighexactly the same as four ofthe smaller packs, but cost€10.35. So you pay anextra 3.5 per cent for alarger pack. An extra 6 percent here, an extra 3.5 percent there... no wonder theprofits keep rolling in.

The economy here willresume growth next yearand may enter a prolongedperiod of expansionaccording to National IrishBank.

In his latest quarterlycommentary, the bank’schief economist, Dr. RonnieO’Toole, said the economywould “move sideways” thisyear wtih some sectorscontinuing to contract whileothers moved into therecoveryphase.

He said next year theeconomy would “switch to aperiod of relatively rapidcatch-up growth, with GDPincreasing by 3.5 per cent.

“Following its recessionin the early 1990s, Finlandenjoyed a prolonged periodof high growth as thesavings rate plummeted,unemployment fell andmuch of the slack in theeconomy got taken up,”said O’Toole, “The same is

likely in Ireland.”While last year was

challenging globally forattracting foreign directinvestment, thereputational damagesuffered by Ireland causedits performance to be belowthe average.

However, O’Toole saidIreland was well positionedto take advantage of aglobal upturn when it came.“Ireland had lost asignificant degree of pricecompetitiveness in the firsttwo years of themillennium; half of this hasnow been clawed back.”

He said cities woulddominate the next fiveyears of economic growth.“Policies such as the carbontax and the curtailment ofspending on public services,together with the sourcingof most new export jobs incities, will act as drivers ofurban growth.

Buy large and paymore!

Rail snack prices head north

A voucher scheme isgiving traders access toinnovative solutionsthought up by colleges

When he set upMorningstar Bakery in2006, Daniel Knight knewhe had the right recipes tocreate a selection ofenticing traditional breads.What he found harder toperfect was an innovativeway to help his business torise like his loaves.

By chance they cameacross Enterprise Ireland’sInnovation Voucher scheme,which pays for smal firms topair up with the researchdepartments of third-levelcolleges across the countryto find innovative solutionsto business problems.

“We were using plainwhite labels and werethinking of using printerpaper packaging, but weweren’t sure,” said daniel.

They used an InnovationVoucher to get St. Angela’sCollege in Sligo to domarket research for them.“It showed us thatconsumers reactednegatively to printerpackaging, thinking of it asoverly commercial. We area traditional bakery whereeverything is done by hand,and that is our sellingpoint.”

The study also indicatedthat what they really

needed was a strongerbrand identity, usingtraditional labels, but onesthat spelt out clearly thehealth benefits of theirartisanal breads.

Since they added that tothe mix, business hasboomed. “In the two yearssince we got our innovaitonvoucher, our turnover hasdoubled,” said Daniel.

Innovatiion Vouchers areavailable to small frms witha business opportunity orproblem they wish toexplore, building links withthe nation’s third-levelcolleges in an effort toincrease innovation inbusines. The initiative was akey recommendaiton of theSmall Business Forum in itsSmall Business is BigBusiness report, publishedin 2006.

It was introduced thefollowing year. Initiallylimited to the republic, thescheme now includes 10colleges in the north.Almost 2,000 InnovationVouchers have been givento smal firms since, with800 having been redeemedand the majority of theremainder still live.

Each voucher is worth€5,000 and can be used topay for a specific researchproject done by anominated third levelcollege.

Innovative Solutions

TGM

February-March 2010 33

Its the great trainrobbery - Irish-style.Passengers from therepublic travelling on theEnterprise train betweenDublin and Belfast arecharged a third more forfood and drink than theirNorthern Irish counterparts.

Prices on the cross-border service in euros areup to 36% higher thanthose in sterling. Thisincludes hot food,

sandwiches, hot beverages,bottled water and alcoholicdrinks.

The route is jointlyoperated by Irish Rail andNorthern Ireland railwaysbut the menu prices on theirwebsties highlight thedisparity betweencurrencies.

The conversion rate usedis Stg£1 to €1.50, althoughit is at least two years sincesterling was that strong. Ithas fallen steadily: 1£ wasworht almost €1.11.Marsand Snickers cost 60p fromthe on-board trolley, whichshould work out at 66c.However, the euro price is90c, 36% higher.

A cup of tea (Stg£1.35,€1.49) costs €2. A savourypie with herb crust(Stg£3.95, €4.37) costs€5.80.

Mark Gleeson of RailUsers Ireland, whichcampaigns for betterservices and conditions onIreland’s rail infrastructure,said “They don’t update it ona regular bais and sterlinghas shifted significantly, inthe past six months

especially.Catering on the

Enterprise is operated byCorporate Catering, acompany contracted jointlyby Irish Rail and NorthernIreland Railways.

Barry Kenny of Irish Railclaimed the differential didnot affect many customers.“As customers on theEnterprise service ... tend tohave both currencies, theycan, of course, pay in sterlingregardless of where they arein their journey or wherethey board,” he said.

In the past, passengershave complained that faresare higher for journeysstarting in the Republic.

Learning more about yourbusiness and customer profitabilityby carrying out detailed analysis willbe more beneficial than knee-jerkcost cutting.

Most of those running SMEs mightassume they know exactly what makestheir business tick. But it is easy toconfuse familiarity with fact. Ensuringyour organisation survives 2010 andbeyond means being able to answertwo key questions: “Do I really know mybusiness? and “Is what I assume to bethe case actually the case?”

In a thriving economy manybusinesses prosper despite, notbecause of, their best efforts. It isrelatively easy to identify and exploitgrowth opportunities and, whilemistakes are made, market buoyancymeans thye rarely prove fatal if the corebusiness is sound.

Once a downturn begins thischanges. Sales slow and customersstart tightening their belts. Companiesrespond by cutting overheads to getbreathing space. But as the crisisdeepens they have to find othersolutions, such as increasing value tocustomers awithout adding cost andtrying to use existing resources to offera wider range of products or services.However, such knee-jerk reactions arenot always productive in the long term.

Pioneer Security provides electronicsecurity installation and maintenance tothe upper end of the corporate sector.generally the company would expect tosee a surge in installations in the lastquarter of the year as companies spendtheir capital budgets before the yearend.

“This did not happen at the end of2008 and by early 2009 we recognisedthat much of this was not delayedexpenditure, it simply was not going tohappen at all,” says operations director,Jochen Riehn who founded Pioneer withMartin Whelan in 2004.

While it was tempting for Pioneer totry to make up for falling revenues byoffering “budget” systems and serviceto a wider market, the partnersresisted. “People opting for budgetsystems are far less inclined to take outmaintenance contracts and all you endup doing is increasing your turnoverwith little or nothing to show for it,” saysWhelan. Pioneer’s response was to stick

with its core business but to tweak itsservice offer to make it more costattractive. “This has helped us maintainour reputation for high standards whileincreasing the options for customers,”added Whelan.

Understanidng exactly whichelements within an operationcontribute to profits and which do notis essential. The same goes forcustomers. A customer may appear

significant when the value fo theirbusiness for a year is added up, butwhen this is balanced against the costof servicing their account they mayactually be costing money.

“Taking a look at how profitable thecustomer is allows you to make aconfident decision when it comes to keystrategic issues such as resonding topressure to reduce prices,” saysCatherine Goodman of Business

D O Y O U K N O W Y O U R B U S I N E S S ?

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Development Consultants, Goodman &Associates. “To assess a customer’sprofitability take sales less direct costs.Ask ourself: does this customer take upa lot of your or your staff’s time? Arethey mroe demanding than othercustomers? What is the cost of the timeand energy you expend on their behalfbeyond what they pay you?”

The Pareto principle (also known asthe 80-20 rule) states that for many

events roughly 80 per cent of theeffects come from 20 per cent of thecause. Translate this into a corporateenvironment and it sugggests that 80per cent of a company’s sales or profitswill come from just 20 per cent of itscustomers.

This is a crude measure but theprincipal is sound. “Often when youassess the real cost of demandingcustomers, you will discover that they

are not contributing to the profit in thebusiness. In these cases you are betteroff investing your time in finding newcustomers,” says Goodman. Looking atthe true profitability derived from eachcustomers means being absolutely clearabout what is being measured.

Depending on the type of businessa range of factors need to be taken intoaccount, such as: product mixrequirements; order size and deliveryfrequency’ special requirementsincurring additional costs; discountlevels; cost of extended credit facillities;and apportioning of all businessoverheads.

This type of detailed analysis usuallyshows that customers who generate thegreatest profit are those with thesimplest requirements. Large customerstend to drive hard bargains and exploittheir size to get perks such as specialdiscounts and a premium service at noadditional cost. Equally, fulfilling therequirements of a small customer maydemand the same level of attention andcost as meeting the needs of a muchlarger one, but without the additionalrevenue.

Detailed analysis can also revealwhat elements of its product or servicerange are the most valuable in terms ofprofit. This type of analysis should notbe a once-off. Today’s managementinformation system facilitate theextraction of in-depth data at relativelylow cost and give managers muchgreater clarity about where pfofits arebeing created and lost in their business.

If it is done consistently, trends willquickly emerge that can be invaluablein helping businesses to set keybenchmarks such as realistic sellingprices. Quality information can helpensure that the business model is bothfit for purpose and sufficiently flexibleto respond in changing circumstances.

For example, it can help a businessclarify what its core business should be,based on criteria such as optimisingreturn on capital employed. Duriing adownturn driving sales through non-core activity may yield short-term cashbenefits. But it may also ultimatelyprove to be a distraction. It may also tieup capital that could be used moreproductively in developing newopportunities, for example in exportmarkets.

D O Y O U K N O W Y O U R B U S I N E S S ?

February-March 2010 35

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Despite its recent good results thereis little optimism about future growthfor the food group, Aryzta.

Aryzta boss Owen Killian was backin cautious form recenty as thecompany reported interim results.Killian is among the market’s mosttight-lipped chief executives, and anoted openness about the company -after the IAWS merger with Hiestand -proved to be short-lived.

This is probably due to the lack oflight at the end of the tunnel for Aryztaat the moment. While the company isperforming well in the currentenvironment, it has seen no evidence ofa lift in consumer spending.

Some market insiders arequestioning whether the market for thegroup’s fresh baked goods will everreutrn to the growth levels seen beforethe recession, with concerns that theconvenience market may have been

changed forever by the economic woesof the past two years.

Guidence for EPS for the full yearremained at 224 cent, dampening thehopes fo some in the market. Someanalyst estimates had crept higher inrecent months, on expectations thatsome lift would filter through intocustomer patterns. The market wouldgenerally appear to be more optimisticthan management, as the share pricesaw a lift after results.

However, the company said “therewas no glimmer of hope” as yet, despitethe market appetitie for good news. Themessage from the company was thesame as that of recent months - achallenged top line being offset byrobust margin performance and goodcash generation.

“What we may ultimately need to beassured of is that, in the absence of aconsumer recovery, Aryzta canstrategise for top-line growth in what isa huge baked goods sector,” said John

O’Reilly of Davy.O’Reilly said that “limited

meaningful national, sector or categorydata make it difficult to assess how wellAryzta perofrmed in the first half”, aperiod during which underlying revenuedeclined by 7.6 per cent.

It is estimated that volumes inIreand may have fallen by 20 per cent inthe period.

In terms of encouraging signs,Killian said that some shop owners wereonce again investing in the “theatre ofbread”.

This relates to how the products arepresented. Key to Aryzta’s strategy isthe marketing of its products.

If a corissant is in a basket at theback of the store, it might not appeal toconsumers but if the smell of freshbaked pastries is wafting near the cashdesk, impulse purchases are morelikely.

For the past year, shop owners havebeen reulctant to spend any additionalmoney on the presentation of products,but even cautions signs of newinvestment at this level would bewelcomed.

Another positive taken away fromthe results briefing was the fact that thecompany has invested in sales teams inGermany and France. While this putpressure on margins in euorpe, it bodeswell for growth prospects in thesecountries.

The share rice prose after theresults were announced, which suggeststhat the market is more positive thanKillian about growth potential.

ARYZTA ERRS ON SIDE OF CAUTION

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The recessionhas spurred

consolidation inthe conveniencemarket, withmore local

shops joiningup with flagshipgroups such asSpar or closingaltogether.

Owen Killian

While most analysts are quitepositive about the stock, some marketinsiders are sounding a note of cautionabout the company. In the boom years,Aryzta enjoyed high margin business

with local convenience stores. It was amutually beneficial relationship. Thelocal stores needed Cuisine de Franceto attract modern consumers, whileAryzta (or IAWS) provided the ovens

free of cahrge, guaranteeing a channelfor its products.

The recession has spurredconsolidation in the conveniencemarket, with more local shops joiningup with flagship groups such as Spar orclosing altogether.

This may impact on the margins forthe Cuisine de France business in thelonger term, with the branding of breadand baked goods becoming lessimportant in these well-known chains.

There may also be fewer shops tosell their goods in after the currentshake out of the retail market.

Another thorn in Aryzta’s side is itsinvestment in Grangecaste bakery in CoDublin. While it is an impressive facility,it now looks to have too much capacityin the depressed environment. There islittle hope of demand returning todouble digits for some time to come, solonger term projections for demandmay never occur.

It was origiinally anticipated thatthis modern facility woudl supply theBritish market, but sterling has notmoved in favour of Aryzta, and it nowlooks like a high-cost production centrefrom a currency point of view.

The company could have the firepower for a large acquisitiion, given thatits cash flow and balance sheet havecontinued to perform strongly.

Investors will be keen to seeevidence of renewed consumerspending on Aryzta products when itsfull-year resutls are reported.

But some sceptics in the market willneed to be convinced that the companycan continue on the same path it tookduring the boom years.

... some sceptics in the market willneed to be convinced that thecompany can continue on thesame path it took during the

boom years.

February-March 2010 37

TGM

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Irish exports fell 1 percent by value in 2009, ledby a decline in demand forcomputer equipment andelectrical and industrialmachinery, figures from theCentral Statistics Officeshow.

However, a decline invalue of imports of morethan 20 per cent gave riseto a trade surplus of €38.6billion, 34 per cent higherthan in 2008.

Some of the largestdeclines were to Britain,which fell 15 per cent from€14.3 billion to €12.2billion. Exports to Germanyfell 21 per cent to €4.8billion.

However, exorts to theUS rose by 5 per cent to€17.5 billion.

The value of imports fell22 per cent from €57.5billion in 2008 to €44.8billion last year, as demandfell for cars, petrol andcomputer equipment. Thevalue of imported roadvehicles plunged 72 percent.

Trade surplusboost

ESB spark gas price war

Months after a Britishgovernmetn bodyconcluded that organic foodis no healthier, organicpotatoes have been given aroasting by Irishresearchers who found theydo not taste any diferentfrom regular spuds.

A research team at theDublin Institue ofTechnology asked 10trained food assessors and80 regular potato eaters tocompare the two varietieson appearance, aroma,texture and taste. Theprofessional assessorsfound the regular potatoesto be slgihtly softer, wetterand less sticky, while theregular eaters could notdetect any difference. Noneof the group found that theorganic spuds tasted better.

“There are so manydifferent views on thissubject and I know somechefs may not agree with

us,” said Roisin Burke, alecturer in culinary scienceat DIT who co-wrote thestudy. “There are otherreasons why people eatorganic potatoes, such asthe lack of pesticides, butwe found no difference intastes.”

Last August, researchersworking fo the British FoodStandards Agency claimedthat a review of scientificevidence indicated thatpeople who pay on average60% more for orangic foodin the belief that it ishealthier are wasting theirmoney. Conventionalpotatoes cost €1.06 a kgat Tesco compared to €2for organic ones at TheOrganic Supermarket inBlackrock.

Sales of Irish organicproduce jumped 13.2% inthe year to last July, valuingthe industry at €124million accordiing to Bord

Bia. Its research indicatesthat 73% of Irish groceryshoppers bought an organicproduct in the previousmonth, compared to 45%in 2008 and 20% in 2003.

The perceived healthbenefits of organic food,conferrred through its “freefrom” status, is the mostimportant aspect to Irishconsumers. Bord Biaresearch has found that73% say “not having addedchemicals or pesticides” isthe main benefit.

The DIT researcherscollected organic andconventional Orla potatoesfrom two sites in Navanwhich had been harestedduring Ocober andNovember 2008. Theytested a batch every weekfor three weeks, examiningcolour, texture, dry mattercontent and acidity.

Taste no better for organic spuds

The ESB is planning toopen a new front in theenergy price war by sellinggas to domestic consumers- ending more than 80years of suppling onlyelectricity to households.

The state companywhich says its plans are“preliminary” hopes toprofit for the ending of

Bord Gais’s monopoly ongas supplies to householdsconnected to the nationalgrid.

Flogas, owned by stock-exchange company DCC,has made the first move -under-cutting Bord Gais’stariff by up to 9%. Airtricityis poised to follow in thecoming months, having

delayed plans for a gaslaunch earlier this year.

After losing 500,000 ofits 2m domestic customersto new entrants in the pastyear, the ESB wants thefreedom to retaliate bydropping electricity prices.This would involve endingthe regulator’s price freezeat the ESB.

40 TGm

N E W S

As the country’s mostexperienced retail and wholesalebusiness, BWG Group continuesto be at the forefront ofconvenience retailing in Ireland,driving innovation and deliveringhigh quality products and servicesthrough its SPAR and MACE storenetworks.

Based in Ireland, BWG alsohas operations in the UK, andemploys over 900 people directlyalong with an estimated 20,000people through its various retailfranchises.

The SPAR network has beenoperated in Ireland by BWG since1963 and is now a permanentfixture in the convenience retailsector in Ireland. The chain haslong been recognised as a trustedbrand, delivering quality productsat a competitive price through itsnetwork of conveniently locatedstores.

In addition to owning andoperating the SPAR network,BWG also operates the MACE andVivo brands, along with the XLnetwork operated through thecompany’s Wholesale division. Intotal the company manages over900 convenience stores in Irelandand the UK.

The convenience retail space isextremely competitive and SPARin particular continuously strivesto exceed consumer andmarketplace expectations inorder to retain its leadershipposition as the country’s largestconvenience chain.

SPAR Ireland comprises over470 high quality storesincorporating three formatsdesigned to meet the lifestyleneeds of its many and variedcustomers.

Local SPAR stores are thenucleus of the network and form

the cornerstone of the local townsand communities in which theyoperate. They offer acomprehensive range of everydayproducts and services to cater toshoppers hectic lifestyles.

SPAR Express representsforecourt shopping for people onthe move and EUROSPAR catersfor family and supermarketshopping, with a more extensiverange of goods including freshfruit and vegetables, bakedgoods, salad bar and deli.

People’s shopping habits haveevolved radically over the lastdecade, in line with their morehectic and diversified lifestyles.Traditional shopping and mealtimes are a thing of the past andmost people now do weekly ‘top-up’ shops or purchase meals on-

the-go.For SPAR, a large part of its

success can be attributed to thecompany’s ability to developstrategies that adapt and respondto consumer trends. When itcomes to standards andinnovation in convenienceretailing, SPAR is always one stepahead of the competition. Onesuch example is its successfulrange of third-party partnerships.

SPAR goes beyond thetraditional deli counter to offer itscustomers more choice for sit-down dining and meals on-the-go.Many individual retailers haveopted to participate in one ormore of the bespoke partnershiparrange-ments on offer, including:Treehouse Juice and SmoothieBar; SPAR’s exclusive Signature

BWG AT FOREFRONT OF CO

Sandwich range; the pizza/pastafood concept, ‘Pazza’; and KitsuNoodles. SPAR stores have alsotaken a significant slice of theever-increasing gourmet coffeemarket, with more than 300 in-store Insomnia and Tim HortonsPremium Coffee and Doughnutrange counters. SPAR continuesto explore opportunities for newpartnerships and food optionsthat respond to the expandingtaste buds of the discerning Irishconsumer.

BWG has been driving asteady growth plan over the lastfew years, with the expansion andremodelling of its store networks,involving revamped shop interiorswith revised store layout anddesign, new food strategies andproduct offerings as well as a

growing emphasis onown-brand products.

Across BWGBusiness Divisions,development of OwnBrand Ranges hasbecome a majorfocus. According torecent consumerresearch undertakenby Nielsen, own-brand is highlightedas a key growth areafor retailers with amajor focus on priceand value in thecurrent economicclimate. Over 80%of Irish consumersnow claim to buyown-brand and 46%claim to buy morenow compared withsix months ago.

According toNielsen, SPAR isleading the way inIreland when it comesto own-brand

purchases in the convenienceretail sector. Figures show thatpenetration of own-brand(including ‘exclusive’ alcohol) inthe convenience market isapproximately 6.3%, howeverSPAR is ahead of the market with7.1% participation. MACE hasalso extended its range in recenttimes, through a link up withPalmer & Harvey to introduce the‘M’ Brand Range.

Following a successful MBO inAugust 2006, BWG has steadilyexpanded the business and, inthe second half of 2008,management completed a deal toacquire Mangans Wholesale. Theresult is that BWG now controlsthe entire MACE store network inthe Republic of Ireland.

This acquisition has givengreater impetus to BWG’s plan toraise the profile of its MACEnetwork in Ireland, emphasisingthe brand’s unique sense of placeand strong community presence.

On the wholesale side, BWGoperates the Value Centre cashand carry business, operating outof 25 outlets in key populationareas nationwide. In late 2008,the division commenced tradingfrom a new, purpose-built NorthRoad facility – just off the M50.Also part of the Wholesaledivision BWG Foodservice unitsupplies the catering industry.

In Britain, BWG owns ApplebyWestwood – a SPAR wholesaler insouth-west England withresponsibility for 350 SPARfranchises.

Chief executive Leo Crawfordjoined BWG in 1996 as managingdirector and was appointed toCEO in 1999. In October 2006,Triode Investments Ltd. acompany controlled by LeoCrawford, John Clohisey and JohnO'Donnell completed thepurchase of BWG Group fromElectra.

Leo Crawford is also thePresident of SPAR International,a role he was appointed to in2005.

CONVENIENCE RETAILINGTGM

Leo Crawford

February-March 2010 41

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N E W S

Known Stateside as the celebrityfavourite 'Maple Syrup Diet (as followedby Beyonce and Madonna to name afew) and establishing itself as theleading detox programme in the UK,Lemon Detox is on the rise in healthfood shops nationwide due to thegrowing demand from customers.

Says Cuka Clarke, MD of PureNatural Products that distributes theproduct, “The uptake of Lemon Detox inthe UK has been tremendous. We haveseen an impressive growth of over350% in the last year and popularity ofthe product continues to gainmomentum at an astonishing rate asthe likes of Planet Organic and Revitalcontinue to reorder to meet demand.Sales are forecast to continue risingnext year.”

The internationally acclaimed five to10 day detox programme is designed tocleanse the body from the inside outwhile helping shed unwanted pounds. It

also offers ‘relaxed’ versions whereclients can replace one meal a day orone full day of food each week with theLemon Detox formula.

Due to its proven efficacy, LemonDetox is fully endorsed by leadingmedical experts including Jan de Vries,leading naturopath and acclaimedauthor, Dr Janine Leach, President ofthe Naturopathic Society, leadingnutritionist Amanda Griggs, Dr MichelOdent, one of the UK’s leadingObstetricians and Dr Elizabeth Adalian,Chair of the Homeopathic University.

Sold in over 30 countries worldwide,Lemon Detox is a totally natural detoxsystem that helps the body rid itself ofwastes and toxins safely and effectively,enabling clients to both look AND feeltheir best.

The health and beauty benefits ofLemon Detox include:

Elimination of toxinsImproved complexion

Thicker, more shiny hairStronger, whiter nailsWeight lossRetrained appetiteVitalityEnhanced sense of well-beingMade up of pure water, fresh lemon

juice, either cayenne pepper or groundginger and Madal Bal Natural TreeSyrup, it is this last ingredient that givesthe body the essential nutrients itneeds to sustain optimum performanceand vitality throughout the duration ofthe programme.

The Madal Bal Natural Tree Syrupwas formulated in the eighties by animpressive specialist team led by Dr.K.A. Beyer (psychologist), Dr. Meywald(GP & Homeopath) Dr. Raabe (GP &ayurvedic doctor) and KumudiniWeerawarna (ayurvedic doctor,pharmacist and herbalist) and consistsof four different South East Asian palmsyrups rich in essential minerals andnutrients such as manganese, zinc,potassium and calcium.

Five years and thousands of testslater, the result was a finely balancedmixture meeting all the mineral andnutrient requirements for the LemonDetox Diet. This syrup now sells morethan half a million litres each year to 33countries worldwide.

To make one glass of the LemonDetox formula, mix the following intohalf a pint of hot or cold water:

Two small tablespoons (or 20mls) ofMadal Bal Natural Tree Syrup

Two tablespoons of freshly squeezedlemon juice (about half a lemon). Usefresh lemons, not lemon drink orconcentrat

Half a pinch of cayenne pepper orginger (adjust to taste)

It is important to note that theLemon Detox takes a full commitmentto the programme for real, effective andcredible results.

The Madal Bal Natural Tree Syrup ispriced £39.99 (trade price £26 per litrewith minimum order of 6 litres) and isavailable via mail order. For furtherinformation or to order, please call0845 370 1012 or 0845 370 1014 orvisit www. lemondetox.com.

Lemon Detox on the Rise