An article in the Financial Times (FT) said that Princes would send out an information memorandum to interested parties this week regarding Fray Bentos, and hoped to receive around £30m for the business.
Premier agreed to sell its canned grocery operations to Princes for £182m in early February, including iconic brands Crosse & Blackwell, Smedley’s and Fray Bentos.
But the Office of Fair Trading (OFT) warned of “competition concerns” regarding UK canned pie supply. And Princes undertook to divest Fray Bentos and its manufacturing assets to avert a reference to the Competition Commission.
Asked whether he could confirm the details published in the FT, a Princes spokesman told FoodManufacture.co.uk: “Princes is actively considering a number of options for disposing of the Fray Bentos business after offering this undertaking to the Office of Fair Trading (OFT).
“At this stage, we are considering all options and cannot confirm any details about potential purchasers or outcomes."
Number of relics
The spokesman added: “It is our policy not to comment on market speculation. The timescale is currently under discussion and is part of a process that involves the OFT. As a result, we are unable to comment on any specific timetable.”
Nick Cloke, founder director of brand and NPD consultancy Catalyst Marketing, said that he couldn’t see a great future for Fray Bentos as a brand.
“It's long past its sell-by date. Of course, people can revive brands, but if the buying cohort is ageing then they’re hardly going to be early adoptors of a new chilled or frozen range, are they?” he said.
“There are a number of relics like that, SPAM, Ye Olde OakHam, which are difficult to revive because you need to change consumer eating habits.
“But, of course, eating habits have changed due to a deliberate move away from such products in the first place.
“I am sure someone will buy it for a song, revive it, sell it on, then eventually someone might give up. Someone else may be very positive and see the upside to it, but I can’t see it.”
Canned pie growth
Francisco Redruello, analyst at data consultancy Euromonitor forecasts predicted that UK demand for canned and preserved meat and meat products will grow 2% in retail volume terms this year, due to consumers eating-in more during tough economic times.
But Dr Darren Shirley, an analyst at Shore Capital, said: “It’s fair to say that there’s limited growth in the canned pies market.”
“Fray Bentos is in a category with limited growth, but it’s a well-known brand, so there’s some value in that,” he added.
Shirley said it was “very doubtful” that pork giant Cranswick (tipped by the FT a potential bidder, along with the Irish-based Anglo-Irish Beef Processors) would be interested.