Leading food manufacturers are facing massive, in some cases devastating increases in their pension deficits as a result of the tumbling stock markets. Uniq’s situation in particular was “increasingly desperate and fraught”, said analyst Panmure Gordon as it increased its estimate of its pension deficit to £200m, well above the £90m cash ringfenced by the company.

Premier Foods’ shortfall has grown by £235m since its previous annual report, Northern Foods’ by £98m and Greencore’s £95m, according to estimates by Morgan Stanley.

“At the end of the year we’ll be seeing a number of companies demonstrating their exposure to their pension schemes,” said Jay Shah, a partner at Pension Corporation. “This then affects companies’ ability to raise debt or other forms of finance, and leads to negotiations with trustees on how to finance shortfalls. Companies that used to employ more staff than they do now feel these effects strongly and these kinds of companies are particularly prevalent in food manufacturing.”

The reason why pension schemes have been hit so hard is that they typically invest about 60% of their funds in equity markets and these have fallen 40% in the past 12 months.

Companies could reduce the impact of market shifts by insuring part or all of their schemes or by negotiating with fund trustees to fund the deficit over a number of years, said Shah. Panmure Gordon, which has cut its target price for Uniq from 80p to 25p, warned retailers to consider securing long-term arrangements with alternative suppliers.

However, another analyst warned against excessive gloom about Uniq’s deficit: “Uniq does not have to finalise its arrangement with fund trustees until March 2010, so its situation will depend on equity prices over 2009, not their current levels.”

The company could then negotiate paying any shortfall over a longer period. “The fact the company is loss-making complicates the situation, but the management will need to take action to tackle that long before pension negotiations kick in.”