The margins of Britain’s 150 biggest food and drink manufacturers have been squeezed to a 14-year low, according to exclusive analysis carried out for The Grocer.

Average operating margins stood at just 5.8%, as the giants of grocery endured a 0.8ppt margin contraction, the second largest in the 21-year history of the OC&C Strategy Consultants annual Top 150 report.

The supermarkets’ margins also took a battering - contracting for the first time since the downturn begun, by 0.3ppts - as they were forced to swallow some £404m in cost increases.

“It’s been pretty horrific - 2011 was the Top 150’s annus horibilis,” said Will Hayllar, a partner at OC&C Strategy Consultants.

Average sales growth stood at 5%, lagging the then 5.5% rate of inflation, but branded sales growth stood at just 3.5%, while own-label sales surged by 10.2%.

“Consumers are looking for value and retailers increasing their mix of own label,” added Hayllar.

Some brands were worse hit than others. Warburtons suffered a 52.3% slump in operating profits last year as it struggled to deal with chronic over-capacity, and Moy Park’s profits fell 76.1%, due to intense competition from fast-growing Boparan’s 2 Sisters operation.

But Weetabix delivered a 10.3% hike in profit, and margins at Heinz-owned HP Foods soared from 39.5% to 45.2%.

“Our growth is driven by our fundamental focus on the consumer, and what they want,” said Weetabix CEO Giles Turrell, citing recent NPD such as Alpen Porridge and Ready Brek Squeezers.