Hibernia Foods posted a 5% drop in second quarter sales hurt by higher operating expenses and weakness at its branded desserts unit.

The Irish-based food manufacture said the decline in sales was due to intense competition in frozen desserts from a major advertising, promotional and re-branding exercise by its largest competitor Heinz.

Hibernia said net sales for the quarter to September 30 fell to 48.8m euros from 51.6m euros last year. This resulted in an operating loss of 2.98m euros compared to a profit of 501m euros in 2001.

Chairman and chief executive Oliver Murphy said: “Whilst I am disappointed with the year-on-year decline in our branded desserts division for the second quarter, I believe the circumstances that gave rise to the decline will benefit the category as a whole going forward.

“We believe we will be profitable in fiscal 2004.”

Over the first half, net sales at the group were up 2.4% to 93.9m euros from 91.7m euros in 2001.

The company also named Maggie Devine, previously employed by Geest, as its new UK sales and marketing director.