Sugar row hits Real Good Food Company

By Nicholas Robinson

- Last updated on GMT

Sugar row blamed for RGFC's loss
Sugar row blamed for RGFC's loss

Related tags British sugar Sugar

The Real Good Food Company (RGFC) has blamed its row with British Sugar for its half-year loss and has referred the dispute to the European competition authorities.

Earnings before interest, tax, depreciation and amortisation (EBITDA) for its Napier Brown sugar business were down by £3M for the six months to September, according to its half-year results.

“The dispute with ​[Associated British Foods’s] British Sugar adversely impacted the results of Napier Brown in the second half of the financial year,” ​it said.

New sugar contract

The RGFC accused British Sugar of anticompetitive behaviour, as a result of its dominant market position.

However, a new sugar contract in October has returned the business to growth, said Pieter Totté, RGFC’s executive chairman.

“After suffering the impact of our pricing dispute with British Sugar, we are pleased by the start we have made to the new sugar contract year in October,” ​Totté said. “Since, our Napier Brown business has returned to profitability.”

Despite negative results for the RGFC’s sugar business, the rest of the group, which includes its bakery arm Haydens Bakery, had increased its EBITDA to £0.9M for the period, which was up by £0.7M year-on-year.

“Trading across the whole group has been ahead of last year during October and November, with Renshaw and Haydens Bakery continuing to lead the way,”​ Totté said.

‘Remain confident’

“We remain confident about the prospects for the group and we are working on a number of new corporate initiatives, with a focus on delivering value to shareholders.”

RGFC’s complaint about British Sugar has been ongoing and was taken to the Competition Markets Authority (CMA) in April this year.

However, the CMA decided not pursue the complaint, despite a RGFC spokeswoman telling FoodManufacture.co.uk at the time​ that: “We strongly believe in our case and think British Sugar’s actions contravene the requirements of regulatory authorities.”

The dispute with British Sugar affected RGFC’s final year results for 2013, Totté said in a statement in August.

Despite the company’s revenue rising from £265.7M to £272.5M for the period ending March 2013, its pre-tax profits plummeted from £10.4M in 2012 to £3.3M last year.

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