Private equity houses are struggling to compete with trade buyers in the battle for food and drink deals.

In the first three months of 2013, there were only two private equity-backed deals in the UK, according to Grant Thornton - the fewest since the second quarter of 2011.

“This demonstrates the continued difficulty that private equity houses face in finding good businesses that they can add value to,” it said.

Private equity players also admitted that it was increasingly difficult for them to match trade bids.

“Growth opportunities are down but valuations are the same as they were pre-Lehman. In the case of Tesco/Giraffe, for example, I don’t think a private equity buyer would pay that much,” said 3i director Justin Maltz, at a Mergermarket M&A conference in London this week.

Total deals were also down 38% in the first quarter, according to Grant Thornton, despite cheap credit and healthier financial markets.

“Everything points to more robust activity but that is not manifesting itself yet,” said Roland Phillips, a partner at Centerview Partners.