Heinz edges closer to frozen foods sale

By Anita Awbi

- Last updated on GMT

Related tags: Food preservation

Leading manufacturer Heinz, which put its frozen foods business up
for sale last autumn, may have found a buyer for the vegetarian
frozen food range McCartney's.

The international food producer is rumoured to be in talks with Israeli firm Osem, part-owned by Nestle, over the sale of its ethical frozen foods business founded by the late Lady McCartney in the early 1990s.

The division is part of the Heinz international frozen foods portfolio, which was put up for sale last September for £198m (€286m).

The sale could mark the second 'ethical' acquisition in as many months for a Nestle-affiliated firm, following L'Oreal's purchase in March of the highly reputable Body Shop cosmetics firm.

The McCartney food business, started by the animal rights campaigner and former wife of Beatles guitarist Paul, produces soy-based non-GM ready meals and snacks in the UK.

Since its conception the brand has been synonymous with ethical environmental practice and a growing vegetarian convenience food market, even though demand for meat-based frozen foods is decreasing in the UK.

The acquisition could provide a feather in the cap for Nestle which has been criticised for its aggressive marketing of baby food and powdered milk in the developing world, causing campaigners and British student unions to boycott the company.

Although a spokesperson for Nestle declined to speak to foodanddrinkeurope.com about the sale, it is thought Osem is preparing to make an offer under the Tivall banner.

Tivall is already well known in Britain for supplying health food shops and supermarkets with vegetarian and vegan chilled and frozen convenience foods.

Heinz initially gained the rights to manufacture the McCartney range when it took over the frozen foods division of United Biscuits in 1999.

But last week Heinz said it was keen to carry on with a programme of divestures, which has seen the company sell the New Zealand poultry business Tegel among others.

The steady retraction from its non-core food businesses has highlighted the battle the company faces in maintaining healthy profit levels, and is symptomatic of a difficult global trading environment.

Recent Heinz divestitures have included the seafood businesses in Europe and Israel, HAK vegetables in the Netherlands, and HP Ethnic Foods in the UK, total proceeds of which will be around €826m.

Related topics: Market Trends

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