Premier seeks new Fray Bentos buyer

by expressandstar.com - 24/06/2011

"Mr Kipling-maker Premier Foods is searching for an alternative buyer for its Fray Bentos brand after the regulator said selling it to Princes would create a “near monopoly” in the canned pies market."

Premier, the UK’s biggest food manufacturer, agreed earlier this year to sell its canned grocery operation, including two factories and the Fray Bentos and Crosse & Blackwell brands to Princes as part of a deal worth £182 million.

But the Office of Fair Trading said the deal would give Liverpool-based Princes, which already makes own-label canned pies for supermarkets, too big a share of the market.

It has agreed to allow the two companies to seek an alternative buyer for Fray Bentos and some of its manufacturing facilities. If their hunt fails, it will refer the deal to the Competition Commission.

Amelia Fletcher, chief economist at the OFT, said the deal has led to “concern that consumers will be left with extremely limited choices in relation to this product, as well as unwelcome price rises”.

The news will come as a blow to Premier as it tries to raise money to pay down its debt mountain, which stood at £1.4 billion in June.

The St Albans-based firm has also offloaded its meat-free businesses, Quorn and Cauldron, for £205 million this year as it looks to focus on key brands such as Hovis and Mr Kipling.

Princes has grown from being an importer of canned fish into a supplier of products ranging from fruit juice and canned meat to microwave meals and sandwich spreads.

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