The continued drop in fresh potato consumption and a surplus of produce on the market has resulted in a 63% drop in pre-tax profits at tattie processor Greenvale.
In its interim results for the 26 weeks to December 27, 2014, Produce Investments – the parent company of Greenvale – blamed “very challenging market conditions” for a drop in turnover and pre-tax profits in the first half of the year.
The firm, which has a packhouse at Duns and a seed office at Burrelton, Perthshire, saw turnover fall nearly 10% to £80.76million, compared to the same period in 2013. Pre-tax profits were worse hit, falling to £1.95million, from £5.38million before.
Sales in the UK and Europe fell, while sales to the rest of the world increased slightly to £2.57million.
In a statement, chief executive Angus Armstrong said: “The much-documented retailer price wars triggered significant pricing pressure throughout the entire supply chain, resulting in value and volume decline over the past 12 months. This has coincided with an exceptional growing season in 2013 which generated a large increase in supply.”
Looking at the next season, he said: “Early indications point to a reduction in the planted area for potatoes in 2015, which should lead to a crop where supply is more aligned to demand. The volume performance of fresh potato sales is now improving, through deflationary pressure is likely to persist.”