Heinz sells unwanted HP brands

By Anita Awbi

- Last updated on GMT

Related tags: Ketchup

Iconic food manufacturer Heinz is selling several recently-acquired
HP brands in a move welcomed by the UK's Competition Committee
(CC).

The American food giant has agreed to sell the ethnic foods business, bought from Danone last year, to Associated British Foods (ABF) for an undisclosed sum.

The deal will see Heinz passing on brands such as Rajah, Green Dragon and Lotus, as the company reduces its portfolio to concentrate on key areas.

"It's part of the strategy to really start to focus operations in Europe,"​ said Michael Mullen, Heinz Europe director of corporate affairs.

The company will now concentrate on three market categories: ketchup, condiments and sauces, meals and snacks, and infant nutrition.

It is hoped the redirection will bring European operations in line with its successful growth-boosting model in North America and Australasia.

But the manufacturer has come under scrutiny, as the CC opened an investigation into its acquisition of market-leading HP sauce and rival Daddies ketchup.

It is feared Heinz may have violated British monopoly law as it now holds rights to all three supermarket 'must haves', which are leading brands in more than 50 countries.

The Office of Fair Trading (OFT), which originally referred Heinz to the CC, claims that retailers and consumers could be hit due to lack of competition - resulting in higher prices for the leading sauce brands and Baked Beans lines.

But the sale of the ethnic food business will not impact on the CC decision, and a CC spokesperson confirmed it "is not something the committee is looking at in the inquiry."

Heinz defied skeptics last quarter to announce a better than expected quarterly profit rise, posting a profit of $203.8 million for the second quarter to October 26, up from last year's $199m. European sales increased 5.4 per cent.

Related topics: Market Trends

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