Inside the world of business
Greencore rival could be offering plum opportunity
GREENCORE’S privately owned British rival and bidding war nemesis Boparan may be about to throw a few stout-soaked scraps on to the convenience food market – and it’s all in the name of keeping down the price of Christmas puddings.
The Office of Fair Trading said yesterday it was “considering undertakings” offered by Boparan to sell one of its two Christmas pudding manufacturing business to remedy competition concerns raised by its proposed acquisition of RF Brookes and Avana Bakeries from Premier Foods.
Boparan last year trumped a costly bid from Greencore to take ownership of Northern Foods, which through its Matthew Walker subsidiary was already Britain’s biggest supplier of Christmas puddings. Analysts pondered if Greencore’s Northern stumble would send it chasing after Premier’s Brookes Avana as a consolation prize.
This was not to be. Greencore bought British sandwich and dessert maker Uniq for £113 million in July 2011, while Ranjit Boparan went on to make a successful £30 million bid for the Premier businesses in December – capping his cannily expansionary year.
Given that Avana Bakeries is also in the pudding game, Boparan’s customers have since “raised significant concerns” with the UK competition regulator that “due to the distinctive seasonal demand for Christmas puddings”, a Boparan and Brookes Avana merger “might result in price increases” at a time which, as the OFT’s Amelia Fletcher noted, “is already very costly for families”.
The OFT said there was evidence that a combined Boparan-Avana would mean no other firm in the UK would have sufficient capacity or experience to produce puddings on a large scale – in other words, no current player in the £40 million-plus pudding market has the capability to satiate the needs of the major supermarket chains.
Greencore, which its website says makes four million Christmas cakes every year, could acquire that capability, should Boparan’s puddingy crumbs seem like a festive fit with its business.
Taoiseach will take the Hyland road and we'll take what comes
Politicians find it hard to turn down attractive photo opportunities, and "Ireland Day" at the New York Stock Exchange is no exception.
The Taoiseach yesterday followed the path trodden by the Smurfs, Pamela Anderson and other global icons to ring the bell on the opening of Wall Street.
While it may be true that there is no such thing as Belgium Day on the NYSE, the actual value of yesterday's event is hard to quantify – except, that is, for the organiser of Ireland Day, Ian Hyland. Hyland charged participants €1,000 to attend his associated conference and would appear to have garnered strong support from the upper echelons of corporate Ireland, with most of the big accountancy and law firms represented, along with a number of quoted companies.
Plenty of politicians from both sides of the Atlantic were also on hand as Hyland used the event to launch his latest project, Ireland Inc: "an organisation created to strengthen the economic relationship between Ireland and its global trading partners".
While a case can be made for official support for the annual Ireland Day jamboree on the basis that corporate Ireland seems prepared to pay up to get the Taoiseach some favourable headlines and a nice picture, the case for Government endorsement of Ireland Inc is less clear-cut.
The organisation's objectives are laudable, but economic relationships are not something that any state would necessarily want to farm out to the private sector. That said, it is a free country – as the Americans in particular are fond of pointing out – and who is the Government to stand in Mr Hyland's way as he goes about his self-appointed task?
WorldSpreads mess keeps growing
THE MESS gets worse by the day at spread betting group WorldSpreads.
Yesterday the company, dual listed in London and Dublin until the suspension of its shares last Friday, announced that the shortfall in client funds now stands at about £13 million.
This is slightly higher than first thought and is a staggering 44 per cent of the total monies owed to clients by the company.
KPMG has been appointed as special administrators to oversee the sorry mess.
Separately, former chief executive and founder Conor Foley issued a statement to "make it clear" that the first he learned of the "financial irregularities" was on Friday morning last, at the same time as the rest of the "board of WorldSpreads".
His decision to step down as chief executive last Wednesday was "completely unrelated to these issues". Foley said he had been working on a handover process on Friday last when the "irregularities were discovered".
Nonetheless, questions will be asked about his stewardship, given that this happened on his watch.
The spotlight will also be fixed on the system of financial regulation – the company's activities came under the remit of the UK's Financial Services Authority – and the role of the auditors (Ernst Young) in failing to uncover these irregularities.
Once again a coach and four horses have been driven through the checks and balances that are supposed to apply in financial services.
Fraud by its nature is a deliberate deception, hidden from view, but that doesn't excuse lax oversight.
WordSpreads woes are also embarrassing for Charlie McCreevy, our former finance minister and ex-European commissioner, who is a director of the company.
Cheltenham week is usually a highlight of the year for McCreevy but it's a safe bet that the final day of racing there was soured for him by trading in WorldSpreads shares being suspended.
TODAY
US treasury secretary Tim Geithner will testify before congress as the US economic recovery shows signs of strengthening.
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