Heinz is cutting costs, including an 8 per cent reduction in its workforce, and taking a pounds 124m hit to pay for the shake-up.
The US giant's action is seen as the latest example of the pressures facing leading groups with international brands. Philip Morris, the US drink, food and tobacco giant, was the first to respond when it cut the price of its top-selling, heavily promoted Marlboro cigarettes in April.
Heinz and Philip Morris are reacting to the growth of unbranded products and price demands from top retailing groups.
Leading UK brand owners felt the impact of the Philip Morris move and the Heinz action will pile on the pressure.
Shares of BAT Industries suffered acutely from the Philip Morris price cuts; so did Unilever, seen as particularly vulnerable in any food price war.
Suggestions that an adverse government report awaited publication were dismissed as 'rubbish' by the Ministry of Agriculture, Fisheries and Food.
Most food shares suffered reverses. In the past few days Unilever shares, helped by investment presentations, have perked up but yesterday they were back in the doldrums, down 12p at 1,036p.
Cadbury Schweppes, another to enjoy investment support recently, fell 5p to 458; Northern Foods lost 7p to 251p; Perkins Foods 4p to 92p and Unigate 6p to 346p.
But United Biscuits, where takeover rumours (Cadbury?) are never far from the surface, bucked the trend, gaining 6p to 397p.
The rest of the stock market recaptured the glow of lower interest rate hopes.
The Bundesbank may cut its rates today and the disappointing retail sales could encourage Kenneth Clarke, who did not rule out cheaper money in his first Mansion House speech as Chancellor, to keep the recovery under way by tweaking rates lower.
The FT-SE 100 index rose 13 points to 2,883 with the FT-SE 250 index 6.9 higher at 3,212.
J Sainsbury, ahead of an investment presentation at SG Warburg, rose 4p to 488p but Kwik Save fell to a new low for the year - down 6p to 727p.
Great Universal Stores attracted more support with Cazenove rumoured to have produced a buy recommendation. The voting shares rose 13p to 3,038p and the non-voters 30p to 1,720p.
Fisons continued to attract support, rallying another 4p to 172p; even Zeneca shrugged off the woes of its pounds 1.3bn cash call, gaining 7p to 623p with the nil-paid 5.5p higher at 21.5p. Hopes of an 80 per cent-plus take-up spurred the shares.
Standard Chartered, the bank group, again responded to this week's analysts' meeting. Barclays de Zoete Wedd, which put an 800p value on the shares when they were about 600p, has lifted its target to pounds 10. The shares rose 26p to 795p.
The textile group Coats Viyella was another reflecting an investment meeting. The shares put on a further 6.5p to 236.5p with Warburg saying buy. The securities house also put a buy tag on Croda International, the chemicals group, up 6p at 284p.
British Gas, on German buying, rose 5p to 301p; Aviva Petroleum gained 2p to 70p.
BTR dipped 5p to 359p. BZW trimmed this year's forecast from pounds 1.3bn to pounds 1.25bn. It says European sales have not been as good as expected and the Australian dollar has moved against the group.
Water shares continued to bubble, largely on hopes the sector is now deeply ensnared in a dividend race. Anglian Water led the way, up 14p at 484p. Electricities also rose on dividend considerations.
The hard-pressed hotels and leisure sector was another to outperform. The Granada Group results helped sentiment wth the shares up 6p at 415p. Management changes helped Forte 5p higher to 220p.
Airtours, said to be on the verge of taking over Aspro, the UK's ninth-largest holiday group, rose 7p to 332p. On Monday Airtours, which failed to win Owners Abroad after a fierce battle earlier this year, splashed out pounds 25m for the Hogg Robinson travel shops.
TV shares were again encouraged by the prospects of takeover action. Carlton Communications gained 7p to 777p and Central Independent TV put on 8p to 1,933p.
The newcomer Fine Decor, a wallcovering group, reached 253p against a 210p placing price.
Quality Software Products, the computer group, continued to advance on the back of its new banking contract, gaining 25p to 580p, a two- day gain of 54p. The shares arrived in March at 380p.
Clayform again outperformed on the property pitch. The shares, 14p last week, climbed 8p to 33p. The excitement stems from the arrival of the property man Martin Landau.
Tuskar Resources held at 1.25p after Bula Resources said its stake would increase to 16.32 per cent.
The jeweller Owen & Robinson held at 2.25p. Dealings in the new consolidated shares start today. The struggling group's open offer attracted only a 37.62 per cent take-up.
The FT-SE 100 index, at one time up 18.3 points, ended with a 13-point gain at 2,883. The FT-SE 250 index rose 6.9 to 3,212. Turnover was 607.3 million shares with 28,150 bargains. The account ends tomorrow with settlement on 28 June. Government stocks had a positive session
Marine Mercantile Securities, run by Emmett O'Connell, is exciting interest in Dublin. Traded on the City's 535 market the shares have more than doubled to 106p since February. Hopes of Russian oil and gas deals are in the air and there is talk of a US flotation in the autumn. The shares, highly speculative, are an exceedingly thin market and it does not take much action to trigger a sharp movement.
The share sale of Carpetright, the second retailing chain created by Sir Philip Harris, is thought to have been between two and three times oversubscribed. Allocations are expected to be known by Tuesday and dealings should start on Wednesday. Carpetright was started in 1988. Profits in 1991 were pounds 351,000 with sales of pounds 36.52m. In the year ended April they reached pounds 7.81m from sales of pounds 78.63m.Reuse content