Scottish vegetable supplier Kettle Produce has denied press reports that a downturn in its profits was due to Tesco demanding that it stopped supplying Morrisons.
The Fife-based company announced a pre-tax loss of £900,000 in the year to May 28 2005 compared with a profit in the previous year of £880,000.
The company admitted it had stopped supplying Morrisons, but denied that pressure from Tesco had led to this. It blamed higher raw material costs and poor weather for the steep fall in its profits.
Kettle Produce chief executive Susie McIntyre said: "It's unfortunate and unhelpful that someone should put two and two together and come up with 12. Not only is Tesco a key strategic partner, but it has been fully supportive of our recent restructuring exercise and remains our largest customer."
McIntyre said she was confident that a strategic plan would lead to a turnaround in profitability during the next 18-24 months.