American Italian Pasta Company has terminated its mutually exclusive contract with foodservice provider SYSCO Corporation for the supply of pasta from the end of 2006.

The company has instead said it expects to continue supplying pasta to the SYSCO network of operating companies as a non-exclusive qualified supplier, while pursuing the rest of the market.

Under the terms of the contract, American Italian has been precluded from pursuing other food service providers, which present a market opportunity of approximately 375m pounds of pasta annually, according to the pasta firm.

American Italian Pasta Company CEO Jim Fogarty said: "AIPC has had a strong, long-standing relationship with SYSCO and its operating companies and we are looking forward to continuing to be a key supplier to SYSCO.

"Going forward, we also will be able to provide all other major food distributors and multi-unit accounts with our high quality pasta products marketed under both private label and AIPC's own brands.

"Given the outstanding business we have built in the retail private label market, we are excited about pursuing this market opportunity, forming relationships with these customers and continuing to demonstrate the outstanding service levels and quality that our current customers have come to know and rely upon."

During the 2005 financial year, sales to SYSCO accounted for approximately 11% of the company's revenue.

Jerry Dear, executive vice president of AIPC, said, "We look forward to our continued success with SYSCO and its operating companies and to leveraging our food service expertise to expand our business in this growing segment of the industry. Over these next several months we will focus on developing our infrastructure to maximize these opportunities."