UK: ABF tight-lipped over "bakery exit" rumours
Associated British Foods has refused to be drawn on reports that it is mulling whether to quit the bakery business.
ABF, the UK-based group behind Kingsmill bread, was reported at the weekend to be looking at options for the business, which is central to the company's 72-year history.
A report in The Sunday Times newspaper yesterday (18 November) cited a "well-connected source" saying ABF viewed its bread business as "non-core and non-strategic".
ABF, which also owns brands including Twinings tea and the Patak's Asian cuisine range, as well as the Primark clothing retail chain, has grown into one of Europe's top five food firms by market capitalisation. However, its origins date back to the 1930s, when it consisted of seven baking subsidiaries.
Nevertheless, questions have begun to emerge about the future of bakery within ABF. Earlier this month, when ABF published its annual results, the company admitted the business had performed "poorly". The UK bread market is in decline with most of the major players suffering from over-capacity and rising input costs.
Analyst Martin Deboo, from UK investment bank Investec, believed there is a question mark over the future of ABF's bread business.
"Those of us, who have spent a long time in the sector, tend to think of ABF as a big player in bakery," Deboo told just-food earlier this month. "But, they said today (6 November) that bakery represents about 3% of sales. Bakery is nowhere near as important to ABF as it used to be. There is a question over whether ABF will stay in the bread market.
An ABF spokesman refused to "confirm or deny" the report in the Sunday Times. "We never comment on market speculation," the spokesman told just-food today.
ABF relaunched Kingsmill this year to breathe fresh life into the brand and said it saw "significant improvement" from the product during the last six months.
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Associated British Foods, the maker of Kingsmill bread, today (22 April) pointed to a "much improved" performance from its bakery business after a 9% rise in half-year profits....
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