Premier Foods needed some good news.
Tesco has just de-listed a raft of Hovis lines, it’s in the kind of debt that would give George Osborne nightmares – and to compound things, the company is getting a visit from a bunch of The Grocer’s top hacks later this week.
That good news has arrived from an unlikely source: Vladimir Putin. The Russian PM has confirmed a six-month extension to the country’s ban on wheat exports, which now runs to July 2011.
For a bread maker, that’s not what you’d call an obvious morale-booster. But the move gives the Hovis owner added justification for the price increases it recently pushed through, as revealed by our sister magazine British Baker.
Tesco took exception to the hikes, of course, and has ditched a dozen lines from its shelves. Broadly speaking, it got shot of the seedier, grainier niche loaves and left behind the cheaper, better selling, mainstream stuff.
Inevitably, the fact Tesco is the only multiple to react by de-listing lines will lead to the usual accusations of the supermarket throwing its weight around. With the price of wheat 50% higher than it was a year ago, it’s hard to see what else Premier could reasonably have done.
Still, it might not be Premier’s problem for much longer. As The Grocer reported last weekend, Hovis could soon join Quorn in the shop window as the company continues to wrestle with that billion-pound debt.
Robert Schofield must wish he had the kind of job security enjoyed by Russia’s de facto CEO.
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