Fyffes spin-off Total Produce is understood to be a candidate to pick up at least one distribution deal with the State's biggest retailer, Dunnes Stores.

Reports yesterday indicated that Total Produce is likely to win a contract to deliver milk to Dunnes Stores outlets around the State. It is also said to be a possibility to win a food distribution deal.

The deal is one of three worth a total of €200 million a-year that the supermarket giant plans to give out at the end of the month.

Whelan Frozen Foods holds the contracts, which include frozen and fresh food, but ended up taking Dunnes to the High Court last year in a row over charges.

Dunnes has since told Whelan that the contracts will cease at the end of this month, a move that threatens 470 jobs at the distributor as the supermarket chain is its sole client.

Donegal-based Natural Dairies packages the milk sold in Dunnes outlets under the multiple's St Bernard brand.

Up to now it has been distributed by Whelan.

Natural Dairies buys the milk at auction in Northern Ireland before packaging it.

Fruit distributor Fyffes spun off Total Produce in December in a move designed to refocus and boost the value of its two divisions, general produce and tropical fruit.

Fyffes has no stake in Total Produce, but its shareholders, including the McCann family and chairman Carl McCann, own equity in Total Produce.

Both companies delisted from the main markets in the Dublin and London stock exchanges, and listed on the former's IEX market and the latter's Alternative Investment Market (Aim).

Fyffes took a similar route with its property interests early last year when it floated them off as Blackrock International Land.