>>ABF proves a sound investment but must act to offset EU sugar reform

Associated British Foods has been one of the best performers in our portfolio since The Grocer bought the shares two years ago - its share price has risen 17% over that period.

And it reinforced its position as a good investment by posting a pre-tax profit for the year ended September 13, 2003, up 10% to £473m. Sales were up 8% to £4.9bn - helped by the acquisitions last year of Ovaltine and Mazola.

However, ABF will need to keep its promise to make further acquisitions, possibly in branded grocery, in order to lower its dependency on British Sugar, which could come under threat from proposed reforms to the European Union sugar regime in 2006.