Bakkavör ready to prey on 'fragmented' UK market

Icelandic fresh prepared food giant Bakkavör is back on the acquisition trail in the UK, less than a year after snapping up Geest and Hitchen Foods.

The company said: "Management has made it very clear that the UK market is fragmented and that Bakkavör is likely to play an active role in further consolidation. For example, 44% of players in the market sectors in which we operate have a 4% market share or less." However, it was also considering "entering new market areas, where appropriate", it added.

The company has just axed 100 head office jobs at Geest in roles including HR, finance and IT. "We run a highly decentralised structure. Our business units are getting bigger as the market grows and have their own teams in place," it said.

The company declined to comment on whether there would be any further factory closures following last month's decision to axe Geest's ready meals plant in West Marsh Road, Spalding, and transfer production to a more modern factory in nearby Sutton Bridge.

However, there were likely to be further changes. "We will continue to make sure that the businesses make products most cost-effectively ... this will involve the transfer of products between sites where appropriate."

Despite "continued deflationary pressure and high levels of promotional activity", Bakkavör's sales of fresh prepared foods in the UK were up 6.2% in 2005, ahead of market growth at 4.7%.

It also bucked trends in pizza, with sales growth of 11% defying the market's 2% rise. Sales of leafy salads were up 5% against market growth of 2.7%.