Lees Foods, which produces confectionery and cake products, is planning to diversify into the high-end catering market, after warning that its 7% rise in pre-tax profits for 2007 is unlikely to be repeated next year.

The company said the opening six months of 2007 had been "strong" but the second half performance had been affected by increased costs in raw materials, energy and labour. It felt unable to pass these on to customers, as UK supermarkets are increasingly securing cheaper supplies in Europe.

Full-year pre-tax profits for 2007 were up £720,691 on sales up 5% to £15.1m. But the combination of poor weather and an early Easter this year has hit sales of ice-cream cones, produced at its Waverley bakery division, and meringues. In a statement, chairman and chief executive Raymond Miquel said the group had "taken steps to counteract this situation" and was expecting a better performance in the second half of 2008. But he warned: "We expect that results for the full year are likely to be down on 2007."

Despite challenging market conditions, Miquel said the company would continue new product development and consider further acquisitions.

Its readiness to move into high-end catering was signalled last December, when it acquired Patisserie UK for £2.45m, which provided a route into supplying hotels, restaurants and coffee shops.


=== Consumer Tracking ===

== Fairtrade ==

Consumers worldwide spent more than £1.8 billion on Fairtrade products last year - a 47% rise on the previous year - suggesting that more than 1.5 million producers in 58 developing countries now benefit from Fairtrade sales.

This growth was illustrated in a report from Fairtrade Labelling Organisations (FLO), which revealed that sales of juices have almost quadrupled while coffee grew steadily last year by 19%.

The report said Fairtrade is engaging growing numbers of consumers as a result of expansion in existing markets and the opening of new ones. The value of sales in Fairtrade’s biggest markets, the UK and the US, grew by 72% and 46% respectively, with Sweden at 166% and Norway at 110%, the fastest-growing markets.

FLO chief executive Rob Cameron said: "The phenomenal growth demonstrates the groundswell of consumer support for Fairtrade. For producers, Fairtrade represents the difference between just surviving and their ability to invest in their present and plan for their future."