In a quiet market, with modest trading often producing exaggerated price movements, the fear that British groups could be sucked into margin-squeezing price wars as the US market gets even more competitive created ripples of unease.
Unilever, largely on the back of a feared detergent confrontation with Procter & Gamble, has already been hit. Its American food margins could also come under pressure.
The US food market is still heavily brand-conscious, with own- label products a far smaller part of the industry than in this country.
The Philip Morris experience could, runs the argument, be repeated in the food business and, to a lesser extent, on the spirits front.
Such mutterings were enough to clip another 14p to 1,130p from Unilever, which has fallen 59p since the Philip Morris announcement. Cadbury Schweppes lost 10p to 474p and United Biscuits 6p to 383p.
Worries about reduced spirit margins lowered Allied-Lyons 12p to 558p; Grand Metropolitan 8p to 418p and Guinness 14p to 464p.
Cigarette shares were again casualties of the Marlboro initiative. BAT Industries, at one time down 19p, fell another 6p to 874p and Rothmans International 27p to 615p. Since hostilities started, BAT has slumped 125p and Rothmans 60p.
There are suggestions the market has over-reacted to the cigarette price 'war'. Although the possibility of squeezed margins is gaining more acceptance in New York, the sharp revival in BAT shares was due to American investors taking the view the fall had been too steep.
Drinks shares were also unsettled by a cautious statement from Heineken, the Dutch brewer. Whitbread, with close trading links, was the hardest hit. Its widely held, low-voting 'A' shares eased 5p to 456p. The powerful, rarely traded 'B' shares dropped 63p to 875p.
Food retailers were also depressed by renewed competition worries, highlighted this week by Tesco. The growing strength of discounters is one development causing concern. Another is the possible revival at Gateway, following the latest restructuring. Gateway, which has lost market share, is intent on rebulding by increasing its discount operations.
Argyll Group, Iceland Frozen Foods, William Low, J Sainsbury and Tesco gave ground. Kwik-Save was another under pressure, falling 10p to 742p. Asda, the subject of heavy call option activity, recovered an early fall, ending unchanged at 66.5p.
The futures and options exchange is adding seven companies to its list. They are Argyll, National Westminster Bank, Redland, Royal Insurance, Tarmac, Tomkins and Williams Holdings. Zeneca will arrive in June after its demerger from Imperial Chemical Industries.
The rest of the market, as measured by the FT-SE 100 index, is below the level it started the year. At one time it was down 31.6 points but had cut the fall to 10.1 at 2,822.1 by the close.
There was little investment interest. Much of the trading was between market-makers as they sought to keep level books ahead of the Easter holiday. Many institutions, faced with the expected demands of the summertime flotations, felt no desire to take new positions in the second leg of a three-week account.
Wellcome, however, attracted keen interest as an investment presentation failed to impress analysts. Some were dismayed by the 'inconclusive' nature of the meeting. In brisk trading the shares were at one time down 40p. They closed 23p lower at 698p.
Medeva slipped 4p to 214p. US investors have been selling. They have cut their interest, held through Bank of New York ADRs, by 1.14 per cent to 15.76 per cent.
Marks & Spencer was one to attract a cheerful story, with James Capel, in a 160-page exercise, saying buy. But on such a lethargic day the shares could only manage a 1p gain to 339p.
General Electric Co put on 6p to 323p as SG Warburg said buy and British Airways, up 3.5p to 272.5p, responded to US buying.
British Steel continued to feel selling pressure, losing 1.75p to 78p; RTZ lost 12p to 655p on the weak copper price.
Sun Alliance, anticipating sharply reduced losses today, improved 12p to 354p. A deficit of pounds 100m against the pounds 466m suffered last year is expected.
The Queens Moat Houses influence was for once ignored by hotel shares. Forte rose 3.5p to 181p, shrugging off a credit-rating downgrading by IBCA, the European rating agency. The hotel group is due to report the year's results next week.
Hepworth, the building materials group many expect to collect a bid from cash-rich MB Caradon, shaded to 339p as Yamaichi, the investment house, recommended a switch into Blue Circle Industries, up 3p to 222p.
At one time down 31.6 points, the FT-SE 100 index ended with a 10.1 fall at 2,822.1. The FT-SE 250 index lost 3.7 to 3,083.7. Volume was subdued at 508 million shares and 25,369 bargains. The account ends on 16 April with settlement on 26 April. Government stocks were firm
Teredo Petroleum, which faced a boarding party last year, now has to contend with a full-scale bid. Cairn Energy is offering one of its shares for every 11 Teredo shares. It is also raising pounds 5.2m through a placing and open offer at 43p. Teredo advised shareholders to take no action. Its shares fell 0.75p to 4.75p; Cairn was unchanged at 45p. Teredo made a profit of pounds 20,000 last year.
Shares of acquisitive Lloyds Chemists, at 285p, are 100p below the average stock market rating and are a buy, Carr Kitcat & Aitken says. The analysts Tony Cooper and John Chataway expect profits in the year to June to climb from pounds 35.8m to pounds 48m. In the following year pounds 57m is likely. They add, however, that Lloyds' self-imposed restraint on acquisitions cannot be 'relied upon to continue'.Reuse content