Taypack has opened discussions with potential customers as it looks for new outlets for the 80,000 tonnes of potatoes it has been supplying to Asda.

The Perthshire potato giant severed ties with Asda this month, saying its contract offer was not acceptable. The supermarket claimed it had made a fair offer in line with price fluctuations but Taypack argued its proposal was below the cost of production.

The decision brought to an end a £32m-a-year, 10-year arrangement during which Taypack supplied one third of all the supermarket's fresh potatoes.

Taypack said it had since received enquiries from potential customers, although it would not name the companies.

Last week Taypack had said its door was open for a revised deal with Asda, but the discussions with new customers will increase speculation its relationship with the chain is at an end.

"We are marketing the rest of this season's raw material in storage and the enquiries in the past week have been very encouraging," said chief executive George Taylor. "However, discussions are at a very early stage and we remain in a strong position to assess all options that will safeguard our interests and that of our grower base."

The potato specialist packs 100,000 potatoes each year, all of which are grown within 50 miles of its HQ at Inchture. The business is supplied by a grower network that includes Taygrow Produce, a 25-strong member group growing potatoes exclusively for Taypack.

Growers were confident the company was acting in their best interests by cancelling the Asda contract, Taylor added.

Taypack employs 220 full-time staff, but is in consultation over a review of its business structure, with redundancies a possibility.

It currently holds a 9% share of the 1.5 million-tonne annual UK production of fresh potatoes.

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