Bensons bit by crisp war

The crisp wars continue to afflict Bensons Crisps, the troubled maker of Hedgehog flavoured snacks, which has been hit by pressure from the supermarket groups. The company said, however, it hoped the June launch of a new range of snacks featuring characters from the Dandy and Beano comics would provide growth in the second half.

After a rescue rights issue earlier this year, and the closure of a factory in Wales, Bensons yesterday announced reduced losses but a mixed outlook on trading. Losses for the six months to May were pounds 955,000, down from pounds 1.4m last year. Bensons said it hoped to achieve break-even in the second half although a final dividend looks unlikely.

The South Wales factory was closed in June with the loss of 180 jobs but the hoped-for cost savings have been reduced by rising raw material prices, particularly in packaging.

Bensons, which provides own-label multi-packs to supermarket groups such as Asda and Tesco, has managed to push through two price increases of 6 per cent in November and in May, though the rising costs have kept margins under pressure.

The company has transferred production to its Kirkham factor, where there is additional capacity. Bensons said it hoped pressure from supermarket groups for lower supplier prices, was beginning to ease off.

"Raw material prices are levelling out, the seasonal potato crop is looking good and the re-organisation and rationalisation programme has left the group well placed to improve its performance," the chairman, Sid Taylor, said.

Benson's sales for the six months edged up to pounds 14.1m. The shares were flat at 18p.