Unilever to sell bakery business

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Food and ingredients giant Unilever has signed a deal to sell its
frozen pizza and baguette business to German firm Dr. Oetker as
part of a five-year strategy to lift profits by focusing on big
brands, reports Chris Mercer.

Unilever, which five years ago set out to reduce the number of company brands from 1600 to 400 by the end of 2004, agreed a deal with Dr. Oetker for an undisclosed sum yesterday.

Trevor Gorin, of Unilever, said the sale did not reflect a lack of potential in the European frozen bakery market but was merely because "we are not a big player in the frozen bakery industry and for our business portfolio it is a poor strategic fit"​.

Dr. Oetker should be in a much better position to benefit from the business due to its focus on high quality frozen pizza, but the company did not want to comment until it had discussed the deal more fully.

Gorin said Unilever wanted to focus on major brands within six different categories such as savoury (including snacks), beverages and dressings.

"It makes sense for us to do this. We are active in more than 100 countries so it is cheaper and easier to focus on more widely recognised brands,"​ said Gorin, who added that the company still wanted to keep a number of its "local gems"​ such as Marmite in the UK.

Unilever has had a rough time in the last few years with turnover in 2003 lower than that of the last three years at €42.7 million. But there are signs the company's new strategy is beginning to work; 2003 was the first time net profits went above 1999 levels, albeit only by €23,000 to €2.762 million.

Unilever's profits rose again in the first nine months of 2004, up by €2 million, though the group said it was taking urgent action to restore top line growth.

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