Supermarketeers will try to squeeze manufacturing margins and there are indications that some profit forecasts have already been trimmed.
The erosion of food shares came as the market wrestled with the latest directive from Ofwat, lowering the defensive water stocks, and indications that some of the expectations over BT dividend growth could prove over-optimistic.
The FT-SE 100 index fell 13.3 points to 3,149.0 in often busy trading. Uncertainty over the Budget and a surprising absence of US interest were other restrictive influences.
The food producers, however, attracted much of the attention. Associated British Foods fell 8p to 477p, Cadbury Schweppes 3p to 471p and United Biscuits 8p to 344p. Hazlewood lost 4p to 178p and Hillsdown Holdings 7.5p to 152.5p.
Dalgety dropped 9p to 452p. Besides margin worries it had the additional discomfort of a 5 million share overhang. The stock, from an estate, was eventually placed by Cazenove at about 340p.
The hard-pressed food retailers appeared determined to retain the dubious distinction of remaining the worst-performing sector this year. Already deep in the doldrums, they managed to suffer even deeper losses than the manufacturers. Argyll fell 5p to 269p, Kwik Save 6p to 614p, J Sainsbury 9p to 376p and Tesco 4p to 191p.
Waters, until recently buoyed by yield considerations, were rattled by the latest Ofwat directive. A misreading produced early gains but by the close the sector looked uneasy with double figure falls prevalent.
BT, which has been pumped higher in the highly charged atmosphere enveloping the telecommunications industry, fell 9p to 467.5. The partly-paid dropped 10p to 217.5p.
Medeva put on the most volatile display, swinging between extremes of 106p and 133p in brisk trading. Seaq put turnover at 14 million. The price ended at 119.5p, down 5.5p.
The drugs group lost a High Court patent case brought by Biogen, a US group. The court ruled that Biogen's patent on a hepatitis B vaccine was partially valid. Medeva said it would appeal.
Most drug shares edged forward, helped by the continuing influence of Goldman Sachs, the US investment house, which has adopted a more positive stance towards the sector this week. Zeneca, following an investment dinner, rose 3p to 771p. Among healthcare shares, Amersham International, figures next week, rose 15p to 944p.
Smith & Nephew, holding investment meetings, slipped 2p to 140.5p and London International Group managed a 2p recovery to 153p following the Kleinwort Benson downgrading.
Manchester United's exclusion from the European Cup sent the shares crashing 62p as the market contemplated the loss of income. The price closed at 545p, down 42p.
The club's profits would, of course, have been inflated considerably if it had enjoyed a long cup run. Some suggest winning the final would add pounds 3m to profits; others talk of as much as pounds 8m. Smith New Court expects the club's profits, without the cup, will be pounds 6.3m against pounds 4.2m.
British Petroleum jumped 9.5p to 356.5p on its results. Other oils were firm, with Shell up 8.5p to 723.5p. But Lasmo remained depressed, down another 2.5p to 135p.
Euromoney Publications jumped 123p to 1,306p on its results but Hambro Insurance Services tumbled 47p to 118p following its profit slide. The shares were floated at 138p in March.
Profit warnings clipped First National Finance Corporation 11p to 75p and Transfer Technology 17p to 83p.
HP Bulmer, the cider maker, was firm at 440p following the pounds 8.5m management buyout of its pectin division.
The newcomer Crest Packaging managed a firm debut. From a 135p placing the shares stretched to 145p, closing at 140p.
Thorntons, the chocolate group, held at 168p as members of the founding family disclosed the sale, through SG Warburg, of more than 1 million shares representing 1.6 per cent of the capital. The stock was placed with institutions at 157p.
The marketing group Taylor Nelson was unchanged at 28.5p after Anthony Cowling, a director, sold 100,000 shares at 28p. He now holds 2 million.
Crockfords, the casino, held at 125p as Smith New Court said the shares were underrated. It forecast pro forma profits this year of pounds 17.8m, improving to pounds 20m next year.
Waverley Mining Finance, on the strength of the gold price, rose 4.5p to 33.5p.
Shares retreated again. The FT-SE 100 index fell 13.3 points to 3,149 and the FT-SE 250 index 16.9 to 3,500.4. Turnover was 748.1 million from 29,765 deals. The account ends on 12 November, with settlement on 22 November. Government stocks were firm.
Geevor, the old Cornish tin miner that struggled for years, has returned from suspension - as Coal Investments. The shares traded at 16p. The group, now under the direction of the ex-British Coal man Malcolm Edwards, sees its future in the traumatised coal industry and is seeking five BC collieries. CI raised pounds 1.35m through a placing and rights issue at 10p a share.
Anglo-Eastern Plantations held at 74p as Genton, a Hong Kong group, which has acquired effective control and is bidding for the rest of the capital, confirmed it intended to retain the share quote. Genton is closely related to a Malaysian group. Idea is that AEP will continue as a plantation operator, expanding in the Pacific Rim. Genton's holding will not exceed 75 per cent.