Donegal bakery jobs 'saved' by former owner's buy out

By Jane Byrne

- Last updated on GMT

Related tags Baking

The fresh bread section of Irish business, Gallagher's Bakery, has been bought out by its former owner from Swiss company Aryzta, who announced last month that 124 jobs would be lost at the facility in Donegal following the closure of its frozen food section.

A majority stake in the family owned Gallagher's was sold to IAWS in 2007, but the family retained an interest in it and Declan Gallagher remained on as managing director of the bakery.

The former owner said that he intends to grow the business and increase employment in the region.

Gallagher said that he recognised that the bakery will have to expand into different areas with new product lines and that it will move on such initiatives in the coming months.

The financial details of the transaction with Aryzta, which followed four days of intense negotiations, were not disclosed.

Last month, the Swiss company said the decision to close the frozen food section of its operation was based on the belief that it was unsustainable in the long term.

Market contraction, declining sales and reduced prices were blamed for the closure of the business, which has been in operation in Donegal since 1968.

But Arytza said at the time that efforts were being made to find a buyer for the fresh bread section.

Meanwhile, our sister site, British Baker, reports that bread prices in the UK are set to rise again, with the on-shelf price for an 800g loaf predicted to increase by 10-15p in the next few weeks.

Gary Sharkey, head of wheat procurement for Hovis, told the publication: “Bakers cannot possibly absorb the latest round of increases.

Flour costs have risen yet again, due to world shortages, and there have been big increases in energy costs, a major factor in baking, plus significant rises in oil prices affecting daily distribution costs.”

He said that since September, prices have continued to rise and are now £50 a tonne higher.

Niall Irwin, of Irwins plant bakery in Northern Ireland and president of the Irish Association of Master Bakers, notes that the sector can not absorb recent steep increases and would be forced to pass costs on shortly.

We supply Irish and mainland supermarkets throughout the UK. It’s not just fuel and flour costs that have risen, but edible oils and fats used in baked goods. Dried fruit, too, is continually rising.

“Everyone is hopeful the next harvest will be good quality and plentiful, but if not, it will be a continuous spiral of price rises.”

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