Bakery ingredients supplier The Real Good Food Company (RFGC) has warned that an ongoing dispute with British Sugar will hurt its underlying profits.

Earlier this year, Napier Brown, the refining sugar arm of RFGC, said it had made a complaint “alleging an abuse of a dominant position by British Sugar”, to the Office of Fair Trading (OFT).

In its update, RFGC said a complaint was currently with the Competition and Markets Authority – and the uncertainty around its conclusion would hurt its profits.

The company, which also runs Renshaw and R&W Scott, bakery ingredients suppliers, Garrett Ingredients and Haydens Bakery, said the impact of the sugar dispute “masks progress across the rest of the group, where Renshaw and Haydens both recorded year-on-year ebitda growth”.

Pieter Totte, the group’s executive chairman, said: “It is a pity that our results will be dominated by the dispute with British Sugar, as we continue to make good progress on our strategic plans elsewhere within the group. We believe strongly that the CMA needs to act, in order to maintain a competitive structure in the UK sugar market, particularly with the impending ending of production quotas in 2017.

Plans

“Meanwhile, we will not be diverted from our long-term plans, both in sugar and across the other business, all of which offer exciting growth opportunities.”

The company added it had been “encouraged” by the support of its customers and claimed it would continue to mitigate the short-term impact. RGFC said that, long-term, it was working on a “new competitive and sustainable supply sources”.

Net debt for the group stands at around £31.5m, lower than expected. 

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