Greencore has pulled out of the UK bread market with the sale of its Rathbones own label bakery division to Finedown Mill. The company said the move was consistent with plans to tackle overcapacity in the trade, which has been struggling to cope with soaring flour prices and dwindling margins.
The E30m sale, which follows the disposal of its Milton Keynes bakery in 2002, will help Greencore reduce debts and focus on higher margin market segments, said chief executive David Dilger.
“The disposal completes the exit from the bread market in the UK, a positive development
for the group both commercially and financially. This further sharpens the focus of resources on our convenience food categories, which have strong growth prospects.”
Rathbones, which operates eight bakeries in England and Wales, posted a pre-tax loss of E0.4m before goodwill amortisation in the year to September 26, 2003. Turnover was E102.8m.