Berry recall still hurting Patties

Patties Foods is still feeling pressure on its profits following the mass recall of frozen berries during a health scare in February.

A bag of Nanna's frozen mixed berries

Patties Foods is still feeling the impact of its mass recall of frozen berries earlier this year. (AAP) Source: SBS

Patties Foods is still feeling the impact of its mass recall of frozen berries amid a hepatitis A scare earlier this year.

The savoury pies and frozen desserts supplier says sales of frozen berries are slowly recovering, but the recall is still hurting its bottom line.

The recall in February saw thousands of packets of Nannas Fruit and Creative Gourmet berries pulled from shop shelves, putting a major dent into the company's full year profit.

Patties managing director Stephen Chaur says the frozen berries food category took an enormous hit from the recall, affecting all suppliers but particularly Patties, which was the market leader.

He said no direct link was found between Patties' brands and hepatitis A.

"The category is still underperforming relative to last year," Mr Chaur said after Patties' annual general meeting on Thursday.

"It is recovering slowly, but it is going to be a long, slow haul."

Mr Chaur said Patties was seeing positive improvement in the Nannas and Creative Gourmet brands week by week, but it would take a long time to regain consumer confidence.

"We're pretty optimistic that coming into summer - it's berry season, everyone's getting fit, everyone's drinking smoothies - that sales will start to pick up," he said.

"But really over the last six months, we've really just been working with retailers and consumers to get that trust back."

Mr Chaur said that after the recall, consumers switched to buying fresh berries rather than frozen berries, but were now finding that expensive and were returning to frozen produce.

Frozen berries generated 13 per cent of Patties' sales before the recall.

Patties chairman Mark Smith told shareholders that the company's first half profit is expected to fall to between $7 million and $7.5 million, from $8.2 million in the prior corresponding period.

"We look forward to the second half, when we anticipate seeing the further benefits of our business improvement initiatives... particularly the focus on core savoury brands and innovation," Mr Smith said.

Patties' savoury brands include Herbert Adams and Four'N Twenty.

Patties has been expanding its gourmet pie business to try to offset the impact of the frozen berry recall.

More than 30 people contracted hepatitis A, however microbiological and viral tests in April found no hepatitis A or E coli in samples of recalled frozen berries.

Shares in Patties Foods were steady at $1.165 on Thursday.

3 min read
Published 19 November 2015 at 2:47pm
Source: AAP