UK-based The Authentic Food Co. is to close a plant in Ireland due to a lack of profitability, putting more than 100 jobs at risk.

The company was granted permission on Friday (19 October) by the High Court to appoint joint provisional liquidators to the Dundalk-based TAFC Manufacturing Ireland, according to The Irish Times newspaper.  

Justice Caroline Costello was told the liquidators had not sought any power to continue trading and the order sought was to ensure an orderly wind-down. “Unfortunately, there does not appear to be any alternative,” Rossa Fanning, a representative for the company, told the judge.

The newspaper said since the firm was founded in 2014, it had only reported one profitable year in 2016-17, when it generated EUR400,000 (US$461,866), and is projected to make a loss in the current financial year of EUR2.6m. As of this month, the company apparently owes EUR3.2m to its UK sister and EUR4.6m to the parent. 

A spokesperson for The Authentic Food Co. confirmed to just-food today (22 October) that the Dundalk plant is to close, but added the company’s two other plants in Sharston and Stockport, both in the city of Manchester, are not affected and remain “profitable”.

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The Authentic Food Co. had reportedly acquired the business and assets of the Kraft Heinz facility in Dundalk because other companies in the group based in the UK and Germany had reached capacity and there was a need to outsource to another facility, The Irish Times said.

The company had invested EUR1.8m in the facility but ran into problems in 2017 as the cost of raw materials increased EUR500,000 and amid weakness in sterling’s exchange rate against the euro. The insolvency petition stated costs had risen by EUR4.5m.

Then in 2017, a project to develop a new range of frozen ready meals for a key customer ran into technical difficulties, leading to further unbudgeted costs, including extra shifts for employees, the newspaper added. The company then had to invest a further EUR1m in new equipment. 

Nik Basran, the managing director of The Authentic Food Co., said in a statement seen by the newspaper: “We have faced some serious business challenges in recent months that have been specific to this site. While we have worked tirelessly to meet those challenges head-on and carried out a comprehensive review of the business to try to find a way to make it profitable over the long term, unfortunately, that has not been possible. We have therefore had no option other than to close the Dundalk facility.”

Trade union Unite, which represents workers at the firm’s plant in Dundalk, has written to Ireland’s minister for business, enterprise and innovation, Heather Humphreys, expressing serious concerns at the decision by the company to close its site without consultation.  

Unite’s senior officer in Ireland, Brendan Ogle, said it is a classic case of “shoddy corporate practice”, and he warned that the union would not tolerate such a situation.

He said: “Last year, the Authentic Food Company reported record sales, yet now they have decided to ditch their Dundalk plant leaving around 170 workers high and dry, and potentially leaving the Irish taxpayer to foot the bill for redundancy payments.” 

Ken Fennell and James Anderson of Deloitte have been appointed joint provisional liquidators ahead of a court hearing slated for 12 November.