viewpoint

23 November, 2007
Page 10 
Is Allied Bakeries up for sale? Speculation is rife in the national press with city analysts pitching in (pg 3). It may well be the case, but I can't help wondering how much of it is also driven by the multiples forcing competition between the big brands - Warburtons, Premier Foods' Hovis and Allied's re-launched Kingsmill.
Warburtons is going well and price-wise is currently undercutting Hovis in many stores. Hovis has managed to push through a fair and much-needed increase, which for now is losing the brand market share.Kingsmill relaunched earlier this year with a £14m TV spend but back then wheat prices had not increased by 200%. The impact on millers and bakers since has been severe.But if (and I do stress that word 'if') Allied Bakeries is up for sale, it will be the end of an era for the Weston family and for the UK baking industry. However, I am beginning to think that maybe the bread category is like party politics in this country - historically dominated by two main parties.In recent years Warburtons has come from the rear, refusing to join the 'economy bread' fight and holding firm on price, which has given the company money for investment in new bakeries, new products and new distribution.Just as Allied disposed of its Broomfield shops so Warburtons disposed of its own retail shops. Then Allied disposed of most of its mills. But whereas Warburtons has concentrated on bread, Allied's parent company has branched out into the Primark clothing chain and other avenues and it is those that are delivering so well for the company. When, in February 2002, Garry Weston died I remember speaking to his son George who took over the mantle of heading up ABF worldwide. He wrote in tribute to his father that "he is often remembered for his good timing in the sales of Premier milling in South Africa, Fine Fare and Quinnsworth and the purchase of British Sugar".Good timing means there is no room for sentiment, which in the case of Allied Bakeries may be a tough one to call. Baking, milling and Allied are almost synonymous with the Weston name. But what would you do if it was your money and your shareholders?



My Account

Spotlight

Most read

Social