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Last Updated: Wednesday, 2 March, 2005, 17:49 GMT
Premier rules out food scare loss
Sudan I powder
The Sudan I dye was used to colour chilli powder
Premier Foods, the UK firm at the centre of the Sudan I food recall, has said the scare was "an upheaval" but will not hurt it financially.

The company said this was based on "our assessment of claims and our insurance position".

The illegal dye was used to brighten chilli powder, which the firm added to Worcester sauce used to flavour ready-made meals and other food items.

Premier's operating profits rose 9.1% to 71.9m in 2004, the firm said.

"We believe the company does not have a material financial exposure," Premier's chief executive Robert Schofield said.

"We will continue to review the situation on a daily basis and should the situation change materially we will update the markets accordingly."

'Strong brands'

Premier recalled more than 420 products last month after Sudan I was found in a batch of chilli powder it had obtained from a supplier.

A spokesman for Premier said the firm's assessment of financial impact was made after looking at its own insurance position as well as potential claims that could be made against its suppliers and their insurers.

Consumers are telling us they don't necessarily see this as a brand issue
Robert Schofield, Premier Foods

Mr Schofield said the recall was an "upheaval for the business in terms of time and effort".

But he added: "Consumers are telling us they don't necessarily see this as a brand issue and see it more as an industry issue."

Shares in Premier Foods were up 10 pence at 274 pence by the close of trade on Wednesday.

The company - home to brands including Crosse & Blackwell, Branston Pickle, Ambrosia and Typhoo Tea - also makes cocoa drinks for Cadbury.

In October, it was forced temporarily to suspend production after a fire at its Suffolk factory.

Premier said sales of Branston and its Loyd Grossman soup range were held back by the blaze and it faced "challenging" market conditions and a slower Christmas period.

But it still managed to increase overall turnover by 8.8% in the year to 842m.

In February, it completed the purchase of Bird's custard and Angel Delight from Kraft UK.




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