A merger between IAWS and Greencore should be considered as one of the main elements of a restructuring of the Irish food industry, ABN-Amro food analyst Mr Joe Gill has said.
Speaking at the University College Cork Food Forum, Mr Gill said a combination of the two companies would provide a formidable counter to the consolidating retail sector in Ireland.
"Their operations are complementary, they would be the leader in the Irish flour, sugar, malt and fertiliser sectors. Synergies at operational, marketing and distribution levels are evident. The business would also be one of the strongest quoted agri-food groups in Europe, working from a broadly similar Irish-based business culture," Mr Gill said.
He also repeated the view that the dairy processing needed further consolidation and that this process should be concentrated around Avonmore Waterford Group (AWG) and Dairygold.
"It is clear that processing should gravitate towards the largest and most committed dairy processors, AWG in the east and north and Dairygold in the south and south-west," he said, adding that Kerry and Golden Vale were unlikely to be wedded to dairy manufacturing as core businesses,
The ABN-Amro analyst also urges a "Big Bang" solution to the problems of the beef industry. "Restructuring is required to help refinance the sector, invest properly in its asset base and provide a formidable processing arm for agriculture's second largest activity."
Mr Gill warned that, over the next year, "the beef industry will remain locked in a low-margin pattern with a poor spread of products until radical restructuring takes place".
