There is growing unease about the influence the sweeping changes in the milk industry are having on Northern Foods.
It is feared that immediate prospects have been soured much more severely than many anticipated.
The group has made no secret of the devastating impact of the dismantling of the old Milk Marketing Board and what it has described as "foolhardy competition between dairy companies". The supermarket price war has also hit profits.
Interim figures were disappointing and the year's results, due in June, are likely to illustrate starkly the group's problems. Profits are expected to slump from £156.2m to less than £80m, with reorganisation costs taking their toll. Northern has accused Milk Marque, successor to the MMB, of abusing its monopoly powers, and warned that it will have to cut jobs as it strives to reduce costs. Unigate, the other main milk distributor, has also been forced to signal job losses.
The decline in doorstep deliveries is thought to have hit Northern savagely. In the first half of its year, door-to-door sales under the Dale Farm and Express banners fell 12 per cent.
This week there have been indications that the stock market is losing its taste for Northern. There has been talk of large lines of stock on offer. Deals yesterday took place at 206p, although the shares were unchanged at 208p. They touched 271p last year.
Unigate is, in market terms, more a play on Nutricia, its Dutch associate, than its UK trading position. The market has for long expected it to sell its 32 per cent interest, with HJ Heinz, the US giant, or Sandoz of Switzerland said to be the most likely buyers.
But although the rumours have swirled, Nutricia has failed to attract takeover interest. And there are indications that the baby food maker's management is reluctant to contemplate a deal.
Unigate's Dutch stake is likely to be worth at least £420m. If it should realise its investment it is expected to seek a significant acquisition, with Hazlewood Foods regarded as the most likely target. Unigate was little changed at 352p and Hazlewood held at 111p.
The rest of the market had another lacklustre session, with the FT-SE 100 index slipping 3.9 points to 3,019.5. The old bugbears of currency and political uncertainties again dampened enthusiasm, with a New York upsurge blissfully ignored.
Worries about the direction of US interest rates retarded enthusiasm for government stocks and the shine from the success of the Government's £2bn auction (covered 2.06 times) was partially lost.
Hanson provided another short-lived incentive. During the morning stories swirled that the UK's most famed predator was about to strike.
The shares of the favoured targets - Argyll, TSB, United Biscuits and Yorkshire Electric - responded. Then came the demerger announcement and the sudden glow of enthusiasm disappeared.
The spurned candidates lost their gains. But their discomfort was eased by the indication that the remaining UK end of Hanson was in fact gearing up for a mega-bid. Still, there is every chance the strike will be aimed at an overseas group. However, Hanson scored from the break-up, gaining 7p to 242.5p.
British Steel continued to respond to talk of higher European steel prices and, with the help of James Capel support, rose a further 1.75p to 159p.
Allied Domecq, the drinks group, gained a further 10p to 507p as Cazenove followed the Hoare Govett buy recommendation.
GKN put on 5p to 569p, fuelled by suggestions that its Westland helicopter offshoot had won the support of the Ministry of Defence. It was rumoured that Westland had been chosen to supply most of the RAF's transport fleet in preference to the US giant Boeing.
Westland was said to be in line to provide up to 25 medium sized helicopters. A decision could be announced next week.
Senior Engineering was busily traded, with Seaq putting volume at more than 22 million. The shares fell 2.5p to 72p, lowest for a year. In October the group warned that year's profits would be "significantly" below last year's £24.2m.
Saatchi & Saatchi, the advertising group, slumped 10.5p to 94.5p as another powerful customer defected. Mars, the US confectionery and pet food group, said it was removing its account, worth about £30m.
Vodafone jumped 6.5p to 191p. The group said it intended to concentrate on mobile telephones and would resist the temptation to diversify. Last year margins fell 7 per cent, reflecting, says the company, the success of subscriber growth.
John Tysoe at Societe Generale Strauss Turnbull is looking for £370m profit this year and £525m next.
Bluebird, the toys group, gained 6p to a 253p peak as takeover hopes lingered, but Horace Small Apparel eased to 96p after disclosing a merger approach.
Acatos & Hutcheson, the edible fats group, lost 16p to 240p on a profits warning.
British Biotechnology remained under pressure following last week's disclosure of delays with one of its proposed cancer treatments. The shares lost 13p to 464p.
Electricities continued to reflect the lack of takeover action. Yorkshire Electric lost 24p to 829p; Seeboard 16p to 429p. Even the generators, which seemed to pull out of their dive as the Government's share sale campaign strengthened, lost ground. National Power fell 6p to 480p and PowerGen 2p to 513p.
Acorn Computers' cash call left the shares 5.5p lower at 89.5p. Trading in the rights shares does not start until March 21. The delay largely reflects the Olivetti involvement.
Regent Corporation, once the Waverley Cameron stationery group, is described as an "interesting and undervalued" housebuilder by the stockbroker Bell Lawrie White. It expects profits to hit £2m this year with a 1p payment heralding a return to the dividend list. Next year's figure is put at £3m. The shares slipped 1p to 22p.
The bid for Southern Business, the photocopier distributor, is expected soon. It is suggested the offer will be 50p cash with a 32p paper element. Danka Business Systems, the US controlled group, is one of the rumoured bidders. Its shares fell 5p to 358p. Southern, which admitted a takeover approach after its shares rose, dropped 5p to 62p.