Patties Foods is exiting the frozen berries market after its products were embroiled in a costly hepatitis A scare.
The savoury pies and frozen desserts supplier announced on Monday that it has sold its Creative Gourmet frozen berries business to Entyce Food Ingredients and have cut berries from its Nanna’s frozen product range.
Patties said while it would not disclose specific terms of the sale, it said about $1.8 million was expected to be generated but would have an immaterial effect on its profit for the 2016 financial year.
The transaction is expected to be completed by the end of December.
The sale comes after a recall of thousands of Creative Gourmet and Nannas berry packets in February wiped nearly $14 million from Patties 2014/15 full year profit and continues to hurt its bottom line.
Microbiological and viral tests have found no hepatitis A or E coli in samples of the recalled berry products.
Following the sale of Creative Gourmet, the group will exit the Nanna’s brand of frozen berries and the Chef’s Pride food service brand of frozen fruit.
“Patties will work with all retailers and distributors on a program to exit the frozen fruit category entirely during early 2016,” a company statement said.
Chairman, Mark Smith, said the group will instead concentrate on its core savoury and sweet pastry business, including Four’N Twenty pies and Herbert Adams, which represents more than 90 per cent of its sales and underlying earnings.
Patties will also continue to sell Nannas’ sweet dessert pastries and apple pies.
Shares in Patties were flat at $1.16 at 1200 AEDT.