Fyffes embarks on pounds 400m shopping spree

FYFFES, the Irish fruit and vegetable distributor, revealed it has more than pounds 400m earmarked for expansion in Europe.

In contrast to its American rivals, the group reported a rise in interim profits and predicted further growth this year. The group said it was looking at smaller European companies to add to its Dublin-based business, as well as the possibility of spending "hundreds of millions" on a larger acquisition this year.

"We are always talking to a lot of people," said David McCann, the chief executive. "Our main focus is Europe, and we are thinking that we can make one substantial acquisition in Europe. We are continuing to explore acquisitions up to the pounds 300m to pounds 400m range."

News of the expansion plan came as Fyffes reported a 10 per cent rise in profits before tax and exceptional items to 32.6m euros (pounds 21.2m), boosted by the 7m euro sale of its stake in United Beverages Holdings and two properties in Dublin.

The profit contrasted sharply with recent statements from its US rivals Dole Food, Chiquita Brands and Fresh Del Monte Produce. All three warned of lower-than-expected second-quarter earnings, hit by excess banana supplies in the US, weak demand in eastern Europe and Russia, and the trade row between the US and the European Union over banana import regulations.

The US government, with the support of five Latin American countries, claims the EU's import rules favour former European colonies in Africa and the Caribbean and are demanding a change in the regulations. Both sides accuse each other of violating international trade rules and undermining the World Trade Organisation.

Fyffes, where bananas account for one-third of annual sales, was cautious on the outcome of the "banana wars", but Joe Gill, an ABN Amro analyst, said Fyffes was well placed to weather the dispute.