THE loss of the Mars distribution franchise could cost James Crean £1 million in profits and benefit IAWS by the same amount, according to Goodbody Stockbrokers. Other brokers, however, say the loss to Crean will be substantially higher.
The figure is expected to be quantified when brokers re do their projections for the companies following an expected statement from Crean at today's annual general meeting.
IAWS has been working on winning the Mars products distribution business from James Crean for "a long time", Mr David Martin, finance director of IAWS, said yesterday. This business will be consolidated into the group's food business which is operated by its Shamrock Foods subsidiary.
No one was available from Crean to comment on the loss which will result in the closure of JCM Distribution, its confectionery products subsidiary, with the loss of some 30 jobs in September. A spokesman for JCM said he could make "no comment".
SIPTU said it was informed by the company that, following the loss of the contract, there would be no work for the employees. The union would now be immediate negotiations
JCM to hammer out a redundancy programme, a SIPTU spokesman said.
Mars Ireland had put its distribution business in the Republic out to tender. It was JCM's sole business.
Crean had been hoping to sell JCM, along with Inishtech and other non core businesses including its 28 per cent stake in United Beverages and Master Products Manufacturing, a US office products company.
Instead it is now facing unspecified redundancy costs as well as loss of profits. Crean's last annual report described JCM's recent results as "relatively flat".
Shamrock Foods has just completed its new £8 million distribution centre in Dublin with a "sophisticated" computer system, said Mr Martin. Shamrock already had the distribution business of Master Foods - the US parent of Mars - and, from September, it will distribute all its products in the Republic.
Industry sources see the move to Shamrock as a consolidation of Master Foods' network into one unit in the Republic.
IAWS has not quantified the benefits that will accrue to the group.
