Meat processing giant Vion has come under fire for selling its Paramount Foods pizza arm in July but not doing enough to inform suppliers.

The Grocer can reveal that Vion sold Paramount to Arena Ventures Ltd, run by former Irish Dairy Board CEO and Adams Foods MD Noel Coakley, on 16 July.

Some Paramount suppliers say they only realised Vion was no longer the owner after Paramount entered administration on 5 October. “The only reason we found out was because our invoices hadn’t been paid,” one supplier told The Grocer.

Vion confirmed it sold Paramount to Arena in July but stressed it was not its fault suppliers had not been told. “Under the terms of the share purchase agreement, Arena Ventures Ltd was obliged to communicate the change in ownership to all Paramount’s material suppliers, and Vion understood this had been done,” a spokesman said. “However, we now understand this may not have been carried out.”

Suppliers argue that although Vion officially discharged its obligation to inform suppliers, it had a moral obligation to tell the supply base itself.

Paramount Foods went into administration in October after losing a major own-label pizza contract with Morrisons. Vion stressed the contract loss happened after the sale to Arena and it had sold Paramount as a going concern. “Arena Ventures Ltd was given full access to Paramount Foods’ retail customers to satisfy itself the business was viable,” the company’s spokesman added. “We are a major creditor to Paramount ourselves and have been in dialogue with the administrators with regards to possible recovery of funds.”

Administrators Duff & Phelps did not comment on whether Arena had told suppliers of the change in ownership prior to the administration. It said the conduct of the management would be investigated “as is the case in all insolvency appointments of this type”. The Grocer tried to contact Arena through Duff & Phelps but did not receive a response.