New ice empire is tipped to emerge from frozen wastes

Private investors could reshape sector as top brands are shed

Rumours that Unilever is looking to offload its Birds Eye and Igloo frozen food brands have prompted speculation that private equity buyers could combine them with recent Heinz cast-offs, such as Linda McCartney, to create a frozen foods empire.

Reports that Goldman Sachs was to review Unilever's frozen division came just weeks after Heinz revealed plans to sell its European frozen foods plants.

Credit Suisse First Boston's analyst Charlie Mills said: "No public company seems to be showing any commitment to frozen. But a private equity consortium could put all of these businesses together and build some critical mass."

The Investec Securities analyst David Lang said: "The problem with all of these companies is that while they have pretty good cash flow, they do not offer a strong prospect of long term-growth. McCains might have a look, but venture capital buyers are the most likely."

Unilever declined to comment, but admitted that sales at Birds Eye remained "disappointing", despite a multi-million pound relaunch which had boosted market share.

Meanwhile, frozen ready meals firm CFH is to close its Standlake factory in Oxfordshire and move production to its Wrexham site, blaming the tough market. Alan Jeyes, md, said: "We have much greater capacity than the market demands. It is as simple as that."

It is understood that CFH had picked up a major contract from Iceland in an online auction last December, but lost it before it had even begun after the retailer's new buying director decided to retain the incumbent supplier.

Jeyes declined to comment, but supplying major supermarkets "did not provide much long-term security", he said. "If you don't sell, you can be out within weeks."

At Wrexham CFH is investing £500,000--750,000 this year to handle the Standlake business, he said. Standlake's closure means the transfer of about 10 employees and 40 redundancies.