Premier Foods, the maker of Hovis bread, blamed a "significant" spike in costs, a dispute with Tesco and the "underperformance" of its chilled-foods division for a slump in half-year profits.
The maker of Bisto gravy also bemoaned the downturn in consumer spending for a 0.9 per cent fall in total sales to £974m over the six months to 25 June. However, the group cut its net debt by £225m to £1.14bn after disposing of its meat-free and canning businesses. Jim Smart, the finance director at Premier Foods, said: "We faced a combination of reduced consumer spending and significant raw-material inflation." Profits at Premier Foods tumbled by 28.7 per cent to £67m. Tesco temporarily delisted a number of Premier Foods' brands after a dispute over price increases.