asked the Minister for Finance if he will make a statement in regard to the operation of the Heinz-Erin joint venture since it commenced in 1967.
Ceisteanna—Questions. Oral Answers. - Heinz-Erin Operations.
Heinz-Erin commenced trading in Britain in October, 1967. Initially it launched a range of catering vegetables and recipe products. Sales are at present running at a rate of approximately £1,000,000 per annum. Sales in the first year achieved break-even and it is expected that there should be a small profit in catering products in the coming year. The success of Heinz-Erin with catering products has been of considerable benefit to Erin Foods because it has meant increased throughput for the company at prices which allow for the recovery of direct costs and factory overheads.
In 1968, Heinz-Erin extended into the retail market in Britain. In October a range of convenience meals was launched. Like all other Heinz-Erin products, they are produced by Erin Foods in Ireland. Convenience meals are showing every sign that they will be a considerable success. They are at present on sale only on a regional basis but it is planned to launch them nationally very shortly. Sales in the first year are expected to exceed £1,000,000. The costs involved in launching a retail product in the UK are heavy. Heinz-Erin will incur development expenses on the retail side initially, but these should be small in relation to the turnover achieved and the potential for future profit.
Heinz-Erin's total sales for the coming year are anticipated to be approximately £2,500,000. It is also hoped that a break-even situation will be achieved.
The fact that Heinz-Erin has access to the selling, distribution and related facilities of H. J. Heinz Co. Ltd. has freed Erin Foods in the main part from the heavy overhead burden which would have to be undertaken if the company were marketing its product independently in the UK.
When the Heinz-Erin agreement was concluded, the accumulated losses on the food project amounted to £6.55 million of which the loss in the previous year accounted for £1.6 million. The Heinz-Erin operation has been largely responsible for the reduction in the current loss to an estimated £250,000 in 1968-69. It has also resulted in a significant increase in horticultural activity in this country. The acreages of vegetables grown for the Erin Foods project and the payments to growers during the past three years are as follows: 1966-67: 4,300 acres, £406,000; 1967-68: 6,100 acres, £585,000: 1968-69: 9,200 acres, £900,000.
Would the Minister say if he is satisfied, in view of his statement to the Dáil on 5th April, 1967, that everything possible is being done to preserve the identity of Erin Foods in television and newspaper advertising especially in view of the fact that a recent Sunday Times business feature in a wide-ranging article on the activities of Heinz and its managing director described the joint venture as a merger, which is totally opposed to the information given to the House by the Minister? Is the Minister satisfied that we are doing enough to keep these Irish firms, both the Irish Sugar Company and Erin Foods, clearly before the public as Irish, or are they being merged in the idea of Heinz?
There is no question of a merger. Every effort is made to ensure that the Erin brand is put before the British public with as much impact as possible. I am quite satisfied that this arrangement, this joint partnership venture between Erin and Heinz has resulted in remarkable benefits for the Erin Foods project, as the figures I have cited demonstrate quite clearly.
The Minister promised some time ago that he would give the House an opportunity to discuss this merger. Would he now say if he could make that opportunity available in the coming period?
Yes, I think we could find some occasion on which it could be debated.