Australia-based food group Goodman Fielder has forecast a fall in annual underlying profits as it increases its marketing investment to support product launches in the country’s tough grocery sector.

Goodman Fielder also reported it expects lower core EBIT from its Asia-Pacific business year-on-year amid problems within its poultry business in Fiji.

The company said it expects group EBIT from continuing and discontinued operations – before significant items – for its 2012/13 year is expected to be in the range of A$195-200m (US$181.3-185.9m). The discontinued operations include the Integro oils and fats business and the New Zealand milling operations offloaded in October and February.

In its 2011/12 numbers, Goodman Fielder booked EBIT before significant items of A$233m, which itself was a 20% fall on the previous year.

Goodman Fielder, which reports its annual results in August, said yesterday (25 June) it had made a “significant increase in direct marketing expenditure” in 2012/13 compared to the year before. The company said it had reinvested “to support branded innovation across its core categories”. Australia’s largest retailers Woolworths Ltd and Coles have announced a series of price cuts in sectors like bakery and dairy in recent months.

The company said a higher than expected mortaility rate hit its poultry business in Fiji, cutting volumes and pushing up costs.

Nevertheless, the group said it expects EBIT from continuing operations before significant items for the second half of the year to be 15-20% higher than the first half.

Goodman Fielder also reported the renegotiation of a private-label bread contract in Australia, believed to be with Coles.