Dukat, a subsidiary of Swedish cooperative meat group swedish meats, on Tuesday acknowledged it had lost its prestigious contract to produce ready meals for Weight Watchers Foods, a unit of the Heinz group. The contract between Dukat and Weight Watchers has been in place for eight years and will be terminated from the beginning of next year.

Swedish Meats admitted Dukat had not been able to meet the higher quality demands from the ready meals market in general and Heinz in particular. Dukat, however, said it had planned to upgrade its machine-park, but that it would not be up and running until 2002, and that Weight Watchers had said it could not wait that long.

Dukat produces the Weight Watchers product line for the Swedish and Finnish markets, and it is the market leading brand in Sweden.
Dukat did not say how much the Weight Watchers business accounted for of its total business, but the company had a turnover of SKr185m last year, on which it made operating profits of SKr11m.

The loss of top client Weight Watchers come as another blow to the already battered Swedish Meats group, which recently announced a major restructuring of the group and a management reshuffling in an attempt to shore up mounting losses. It had said eight-month losses after net financial items to August widened to SKr133m, compared with losses of SKr84m in the year-ago period, on sales of SKr5.2bn, down 8% from the year-ago period.