Angry co-op challenges Nestlé move

Irish milk supplier Dairygold plans to battle Nestlé in the High Court over the multinational's decision to close its chocolate crumb production facility at the dairy's site in Mallow in Ireland.

The closure, due to take effect in March 2005, will mark Nestlé's withdrawal from manufacturing in Ireland.

Nestlé decided to move the crumb operation to Girvan in Scotland after a rise in Canadian import duties persuaded it to supply a Canadian confectionery factory from a closer source. The Irish and UK crumb plants are believed to have been exporting 10,000t of crumb a year to Canada.

Chas Hill, chocolate supply manager at Nestlé Rowntree, said: "With the closure of Mallow, Girvan will be Nestlé Rowntree's only chocolate crumb facility and we will therefore be consulting with employees on how to improve manufacturing efficiencies."

First Milk will supply additional milk to Girvan.

The closure at Mallow will mean 57 redundancies and end Dairygold's supply of a reported 80m litres -- or 9% -- of its milk to the confectionery giant.

"Dairygold does not accept that Nestlé is entitled to implement such a decision and has instructed its legal advisers to take immediate action," said the co-op.

In 2002, Nestlé closed its milk processing plant in Omagh, County Tyrone, and it has also sold its confectionery operation in Tallaght, County Dublin.