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April 21, 2008

UK: Premier “mulling own-label disposals”

Premier Foods is reportedly contemplating the sale of two customer partnership units that primarily produce own-brand foods for Marks & Spencer.

Premier Foods is reportedly contemplating the sale of two customer partnership units that primarily produce own-brand foods for Marks & Spencer.

According to a report in the Sunday Telegraph, the maker of Hovis, Bisto and Oxo is considering selling off RF Brookes and Avana Bakeries.

While Premier declined to comment on the report, a spokesperson for the company told just-food that the UK food giant is continuing to increase its focus on its branded businesses.

“Sharpening our focus on branded sales is still very much driving our strategy. The RF Brookes and Avana Bakeries divisions are classified as customer partnerships and produce own-label foods,” the spokesperson said.

Last year, Premier took control of RF Brookes and Avana when it purchased RHM in a deal worth GBP1.2bn (US$2.4bn).

Before the RHM acquisition, 60% of Premier’s sales were branded. After the integration of RHM’s operations this figure fell to 57%.

Premier has signalled its intention to increase the proportion of branded sales, and it is likely that this will be achieved through divestures.

RF Brookes primarily manufactures chilled pies, pizzas, pasties and ready meals for Marks & Spencer.

Avana Bakeries produces celebration cakes, puddings and chilled desserts for the retailer. Premier declined to provide sales figures for these units.

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