Hilton Food Group (HFG) has signed an agreement with Portuguese food retailer Modelo Continente Hipermercados (Sonae) to supply retail packaged fresh meat into its stores.
It is expected to lead to the formation of a joint venture with Sonae in “due course”, Hilton said in a short statement to the London Stock Exchange.
The meat packer will cooperate with Sonae for an initial period of six to nine months to improve the production facilities in Portugal, it added.
CEO Robert Watson said: “This is an exciting growth opportunity for Hilton Foods to work with Sonae, Portugal’s leading food retailer, utilising our tried and tested business model in the Portuguese market.
“As we have previously demonstrated, our flexible and versatile business model enables us to meet local requirements with customers in each country and as such, we are able to enter new territories successfully. We continue to look for further opportunities for geographic expansion.”
Sonae commercial director Eunice Silva added: “We are pleased to be partnering with Hilton Foods and look forward to the benefits and expertise that will enable us to continue delivering the highest quality at the best prices for our customers. Continente will strengthen its leadership in the development of innovation and in the sustainable promotion of the agro food business in Portugal.”
Shares in Hilton have dipped 0.3% to 550.5p so far in today’s trading.
Hilton Food Group’s (HFG) profits have jumped 11% thanks to the ongoing recovery at Tesco, with the boss of the red meat supplier backing the supermarket’s new farm-based range.
Hilton, which is the predominant red meat packer for Tesco, announced in March that it had increased pre-tax profits in the 53 weeks to 3 January by 11% to £28m on the back of increased business with the supermarket.
Overall group revenues fell by 0.4% to £1.09bn despite volume gains because of the strength of sterling last year and currency headwinds of 7.4%.