Around 100 jobs will be lost in the closure of the Dublin plant. From October, production will be outsourced to Largo Foods in Ashbourne, Co Meath, which already manufactures Tayto and also produces competing brands Perri and Hunky Dory.
The group estimated the cost of the closure, redundancies and reorganisation would be i10m over the next financial year. But it expected the changes to boost operating profits in the snack foods business from 2006-07.
Tayto, which once dominated the Irish market, is still the leading brand, with a 40% share of sales. However, it has been coming under increasing pressure since PepsiCo launched its Walkers brand in the Republic four years ago, backed by high-profile promotional campaigns featuring Gary Lineker and the Irish and Manchester United star Roy Keane.