ABFsales were hit by the loss of a Silver Spoon contract with Asda

Associated British Foods has reported a 5% drop in constant currency grocery sales.

ABF said today the main reason for the drop in sales in the third quarter to 21 July was the loss of contracts at Silver Spoon.

As revealed in The Grocer last year, Asda scaled back its Silver Spoon range in October from 31 products to two replacing it with 35 new Whitworths Sugar products.

ABF said Kingsmill owner Allied Bakeries had grown market share and that positive sales momentum at Twinings Ovaltine had continued.

The company’s sugar beet processing business also had a tough quarter, with sales falling 20% on last year at constant currency. It blamed substantially lower sugar prices and weaker EU sales volumes.

ABF announced plans to reduce overheads in its sugar business. It said details would emerge later, but it expected to incur a one-off charge of £20m in this year’s adjusted operated profit.

At the same time, it reported a 3% increase in group sales at constant currency. The results were boosted by 22% growth at Primark.

ABF said it expected full-year adjusted earnings per share to come in ahead of last year.