Profits took a dive at Irish fruit giant Fyffes before it was sold in a mega-deal
But the company’s executives enjoyed a pay rise before the sale to a Japanese conglomerate.
PROFITS MORE THAN halved at Irish fruit giant Fyffes last year before it was taken over by a Japanese food group in a massive deal worth in excess of €750 million.
According to new accounts just filed for the company, its sales grew from €1.2 billion in 2015 to over €1.4 billion in 2016.
However, Fyffes’ cost of sales also rose significantly, from €866 million to €1.1 billion. Other costs, such as ‘administrative expenses’, also increased, doubling from €45 million to more than €80 million.
The end result was that the firm was left with a profit of €11 million, down from €28 million in 2015.
Employee costs also jumped, rising from about €90 million to €137 million as the number of people working for the business increased from about 2,800 to over 4,250.
This does not include Fyffes’ seasonal workers, whose numbers range from just under 2,000 to over 14,000 depending on the season. These workers were paid a total of €28 million, up from €22 million.
The company’s key management were paid a total of €5.2 million during the year, up marginally from €5.1 million the year before.
Mega-deal
Its ‘key management’ is made up of the company’s executive and non-executive directors. Among these is David McCann, who has overseen the company’s growth as it became one of Ireland’s few true multinationals.
David McCann
The firm announced last year that it was set to be acquired by Japanese company Sumitomo in a massive transaction worth about €751 million.
The move represented a big payday for the company’s shareholders, including nearly €90 million for the McCann family.
The deal went through at the start of the year and resulted in Fyffes de-listing from the Irish Stock Exchange. Despite this, Fyffes still has Dublin as its head office and retains a strong Irish presence.
Abuse claims controversy
The firm has been at the centre of considerable controversy lately as it is under investigation over claims of workers rights’ abuses at one of its plantations in Honduras.
As previously examined by Fora, workers claim that they are not paid all the money due to them, work in dangerous conditions and are not allowed to unionise.
Fyffes has rejected all of these claims, a move which sparked a probe by the Ethical Trading Initiative (ETI) – a UK state-funded organisation promoting workers’ rights that counts Fyffes as a member.
Fyffes was suspended from the ETI earlier this year, with the trading body saying that the company needs to engage more with local unions.
The fruit company has been given until 8 September to resolve the dispute, or it will face expulsion from the ETI, something which would prove highly embarrassing for the firm.
