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Last Updated: Thursday, 9 February 2006, 09:04 GMT
Unilever to sell Birds Eye brand
Unilever building
Unilever said it had struggled to grow frozen food sales
Consumer goods group Unilever is planning to sell the majority of its European frozen foods business.

The brands up for sale include Birds Eye and Iglo frozen foods and employ about 3,500 people across Europe.

In the UK, Birds Eye employs about 700 people at a site in Lowestoft, Suffolk and 600 in Hull, East Yorkshire.

At the same time, Unilever - which makes products such as Dove soap and Knorr soup - said annual profits rose 28% to 4.75bn euros (3.26bn; $5.7bn).

Turnover was up 3% to 39.6bn euros, while like-for-like sales climbed 3.1%.

'Tough call'

Unilever has been seeking ways of reviving its business since it issued a shock profit warning in September 2004.

We have decided that the best way for us to create value is by selling the majority of the European frozen food businesses
Patrick Cescau, Unilever group chief executive

The firm began a strategic review of the European frozen foods business - which has a turnover of about 2bn euros - last year.

Unilever said it would be retaining its frozen foods business in Italy, and added that its ice cream business - which includes the Carte D'Or, Magnum and Walls brands - would not be affected as this remained a "strategic priority".

"Deciding to put the majority of our European frozen food business up for sale has been a tough call," said group chief executive Patrick Cescau.

"However, although we have made great progress in increasing profitability in recent years, growth has been harder to come by.

"After an exhaustive review we have decided that the best way for us to create value is by selling the majority of the European frozen food businesses."

Union worries

In the UK, unions reacted with concern to the news of the Birds Eye sale.

"The Lowestoft factory has attracted a loyal workforce who now face an unsettling and uncertain wait," said Brian Revell, T&G national organiser for food and agriculture.

"The T&G is very disappointed that of all the options put forward for the future of the site, Unilever has chosen to sell.

"We will keep a very close watch on the situation but in addition to job security there will be natural concern over the future of the pension arrangements."

See some archive Birds Eye TV adverts

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