An Irish coldstore company and frozen foods distributor has warned that it may be forced to close, with the loss of 470 jobs, because of alleged pressure from its main customer, Dunnes Stores.
Whelan Frozen Foods, based in Dublin, supplies a large number of Dunnes Stores outlets as the company does not have a central distribution hub. The two have had a business relationship for more than 20 years. But Dunnes, the Irish High Court was told last week, is insisting that the terms of its contract be renegotiated, to the point where Whelan claims it could no longer remain in business.
Chief executive Paddy Whelan testified in an affidavit that Dunnes Stores MD Frank Dunne threatened to halve the distributor's business unless operating costs were slashed. Last November, Dunnes cut the margins it was paying Whelan on food by 7%.
Whelan won a temporary court order blocking the reduction, pending a full hearing. The judge directed that the money withheld by Dunnes be repaid. Whelan now claims it is being subjected to renewed "economic duress" and wants further action.