Greencore has sold its interest in Budgetts, a British-based sugar distributor, in a deal worth just over €9 million.

Budgetts distributes sugar to the food and drinks industry. It is being bought by Napier Brown Foods.

Greencore owned one-third of Budgetts. ED&F Man holdings Ltd owns the balance which it is also selling, bringing the total value of the deal to 27 million.

Greencore indicated last night that the deal had stood it a profit of around 6 million. It bought into Budgetts in the late 1980s.

Greencore chief executive Mr David Dilger said the sale of the company's interest in Budgetts "will enable Greencore to continue to sharpen its focus on its growing convenience food activities".

Mr Dilger told The Irish Times the company now had no other sugar distribution interests, except for those in Ireland."This was a small business which was a sugar investment when Greencore was almost exclusively a sugar company," he said.

Mr Dilger agreed that the disposal now reduces Greencore's exposure to European sugar, although in a modest way.

Last month, details emerged of a draft EU document which shows the European Commission proposing a 40 per cent cut in EU sugar prices and a 16 per cent reduction in quotas to 14.6 million tonnes from 17.4 million.

It is also proposing to scrap the safety net intervention scheme in the first reform of the European sugar regime since its introduction in 1968.

The Greencore deal comprises €5.75 million cash at completion, with deferred consideration of €250,000 in cash on the second anniversary of the deal. Napier will also take over 420,000 or one-third of the Budgetts debt on completion.

Greencore will also get almost 1.4 million shares, worth €2.63 million. In addition, €1.83 million was written off to reserves when Greencore acquired its stake in Budgetts. The company is including this in the calculation of profit on disposal.

Greencore's share of Budgetts's operating profit to September last was €1.6 million.