Australia: Frozen berries were source of growth for Patties Foods in 2014
It is yet to be proven whether the company implicated in Australia's biggest food safety scare in years is indeed responsible for the recent Hepatitis A outbreak, but the firm has not ruled out a "material" financial impact.
In the announcement of its half-year results, Patties Foods (ASX: PFL) reported that on Dec. 31 it had AUD$1.7 million of inventory on hand with best before dates in the range of its recalled berry products, but the realizable value could not yet be determined.
"Areas of potential financial impact on asset values and future earnings include principally redundant inventory, out of pocket costs and expenses associated with the product recalls and supplementary product testing, loss of future earnings and intangibles impairment," the company said.
"These areas need to be balanced against avenues of potential recovery."
The brand at the center of the recent frozen berry recall, Nanna's, was one of four iconic core brands the company said were responsible for 9.1% revenue growth, although an organizational restructure and investments in core brand marketing meant profit was down 7% at AUD$8.2 million.
The company reported frozen fruit represented 10% of its gross profit.