Dawn’s move to acquire Dunbia may be Brexit play

Dawn Meats is said to be closing in on a possible takeover of Northern Ireland meat firm Dunbia, a move that would give the Waterford-based group a significant foothold in the UK market ahead of Brexit.

The company is the second-largest beef processor in Ireland behind Larry Goodman’s ABP and one of the main suppliers of beef to fast food giant McDonald’s.

Its flagship Carroll’s Cross plant in Waterford produces more than 400 million beef burgers per year for McDonald’s in Ireland, Britain and continental Europe.

However, the bigger play may relate to cementing its UK supply chain ahead of Brexit and the possibility of tariffs being slapped on Irish meat exports to the UK come 2020, not as unlikely as it once seemed given the current climate.

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Exposed

Ireland’s meat industry is uniquely exposed to Brexit, and Dunbia’s considerable presence in the UK – it has two large plants in the North and seven in Britain - could provide Dawn with a Brexit buffer.

Tyrone-based Dunbia, run by brothers Jim and Jack Dobson, has annual sales of around €903 million and has been on the market for more than a year.

The Dawn deal is by no means assured, as previous reports of a possible Dunbia tie-up first with Brazilian giant JBS and then with UK food firm 2Sisters, the company behind Goodfella’s pizzas, both came to nothing.

Both companies have so far refused to confirm they are in talks, but reports suggest negotiations have been ongoing for a while.

This article was amended on March 21st 2016