Bakery product supplier, CSM, has reported a 23% fall in pre-tax profit to E27m (£22.1m) in the third quarter as the recession starts to bite. Although sales increased by 2% to E639.5m (£523.1m), CSM said it had seen evidence of "downscaling and downtrading" by customers.

Chief executive Gerard Hoetmer said the firm’s bakery supplies businesses, particularly in the UK and Germany, are facing difficult market conditions and consumer confidence has fallen sharply.

John Lindsay, business unit director of CSM-owned Bake-Mark UK, told British Baker: "BakeMark UK has a leading market position within the artisan, in-store bakery and indus- trial sectors. We also have a significant position within the out-of-home/foodservice market. As such, we are subject to rapidly changing consumer behaviour, which is affecting purchasing patterns within these channels.

"We are working closely with our key customers in order to further stimulate volume through accelerating our levels of innovation, including initiatives that meet the needs of the evolving market conditions and supporting focused promotio- nal activity."