Leading food retailer and distributor Musgrave has signed a €20 million contract with waste management group Onyx Ireland. The deal, which covers the next five years, will see Onyx managing waste from the group's distribution centres and stores in Dublin and Wicklow and its offices. Dominic Coyle reports.

Onyx, formerly Ipodec Ireland, previously handled waste for Musgrave operations in the Munster and south Leinster regions.

A spokesman for Musgrave said the contract would see the company increase its level of recycling from 60 per cent to 80 per cent over the next five years. He said the current average recycling figure for business in Ireland was 24 per cent.

The new contract will see Onyx collect around 20,000 tonnes of segregated waste from close to 300 group sites.

Mr John Curran, group environmental executive at Musgrave, said the deal with Onyx was important in "managing a major cost centre in the business and an area which is growing in complexity".

Landfill costs have risen by up to 100 per cent in the past five years in parts of the State and Musgrave says this trend is likely to continue with landfill taxes, disposal and transport costs all likely to rise.

Musgrave says that its franchised SuperValu and Centra stores that are not currently recycling will cut their waste bills by 30 per cent as well as saving on administration and resources.

Onyx will also provide composting facilities for food waste.

Onyx is the waste management division of Veolia Environment. It acquired Ipodec Ireland earlier this year. Onyx has more than 3,000 industrial and commercial customers in Ireland and handles more than 250,000 tonnes of commercial waste annually.

Musgrave says it accounts for almost a quarter of all grocery sales in the State, reporting turnover of €3.4 billion last year.