Tesco has dropped 12 Hovis products from its shelves after soaring wheat costs forced the brand’s owner, Premier Foods, to raise prices.

Hovis, the UK’s second-largest bread brand behind Warburtons, alerted Tesco to the need for further price hikes two weeks ago, according to British Baker magazine.

Tesco subsequently de-listed the lines, which include Original Granary and Best of Both, after Premier sought to pass the price hikes on to consumers.

Wheat prices are currently more than 50% higher than 12 months ago [Mintec] owing to factors such as the Russian export ban and wet weather decimating crops in Europe.

“We cannot comment on our commercial agreements with suppliers,” said a Tesco spokesman. “We always look to provide our customers with great-value bread.”

The news comes amid mounting speculation that Premier could be forced to sell off the Hovis brand to reduce its billion-pound debt. The manufacturer is already hunting for buyers for its £200m meat-free business, which includes the market-leading Quorn brand.

Read more
Premier may have to sell Hovis, say experts (25 October 2010)
Premier to fork out £167m after debt deals go bad (19 October 2010)
Grain hikes set to stifle price promos in bread (4 October 2010)
Acid Test: Hovis Hearty Oats (18 September 2010)