Associated British Foods (ABF)’s Allied Bakeries unit will not be renewing a contract with UK retailer The Co-op from April next year.

London-listed ABF explained in a stock-exchange announcement this morning (2 July): “Co-op has always been one of our more challenging accounts in terms of cost to serve with deliveries to thousands of stores which are widespread across the UK. It is with regret that we have not been able to agree a way forward that makes financial sense and we will therefore be exiting our relationship with them in April 2021.”

Related Company Profiles

View all

ABF UK bakery arm Allied Bakeries manufactures the Kingsmill, Sunblest and Allinson’s bread brands.

The company confirmed to just-food the contract covers private-label and branded products.

ABF made the disclosures in a trading update for the 40 weeks to 29 June.

See Also:

In its stock-exchange filing, ABF added Allied Bakeries had experienced a decline in its private-label bread business during the period, with an increase in Kingsmill volumes not enough to compensate for the loss.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

Reporting on its overall grocery division, which also includes operations in markets such as North America and Australia, the company added: “Grocery benefited in the third quarter from increased sales volumes through the retail channel which more than offset weaker foodservice demand.

“Following flat revenues in the first half, third-quarter revenues were 9% ahead of last year, with increased retail volumes, and margin and operating profit were strongly ahead.” 

ABF said its ACH grocery unit in North America delivered “very strong sales growth”, benefiting from higher demand for baking ingredients and corn oil. George Weston Foods in Australia was also “ahead”, with higher volumes of Tip Top bread and bakery breakfast products more than offsetting reduced foodservice sales at the company’s Don meat business.

Third-quarter revenue from ABF’s grocery business stood at GBP941m (US$1.1bn).