Latest news with #ABFoods
Reuters
09-05-2025
- Business
- Reuters
Future of AB Foods' bioethanol plant imperilled by US-UK trade deal
LONDON, May 9 (Reuters) - The removal of UK tariffs on U.S. ethanol in the U.S.-UK trade deal could sound the death knell for Associated British Foods' (ABF.L), opens new tab loss-making bioethanol plant at Hull, northern England, following a warning last month that its future was uncertain. The trade deal, announced on Thursday, will reduce Britain's 19% tariffs on U.S. ethanol to zero through a 1.4 billion-litre (370 million gallon) quota that far exceeds U.S. exports to the UK last year. AB Foods' CEO George Weston told Reuters on April 29 that the group's ethanol business had faced "significant problems" with "effectively subsidised imports". The group, which also owns Primark and a host of grocery brands including Twinings and Ovaltine, said the way in which UK regulations were being applied to bioethanol was undermining the commercial viability of its Vivergo plant in Hull which produces bioethanol fuel for cars and animal feed. AB Foods is calling for changes to UK bioethanol regulations regarding imports. It warned that unless talks with government "improve the position" it could mothball or close the plant, putting about 150 jobs at risk. "We're very clear what we need to do with the ethanol business - that's a regulatory issue that we need government support on." However, the opening up of the UK ethanol market to U.S. producers means the business now faces a new challenge. "The government's last-minute decision to allow tariff-free ethanol imports from the U.S. into the UK is causing great anxiety to many people in the northeast of England, not least to the many employees and suppliers and farmers involved in the UK bioethanol industry," an AB Foods spokesperson said on Friday. They added that the company was working through the detail and "the implications" with the government. Britain's National Farmers' Union warned on Thursday the ethanol measure could mean the loss of a profitable outlet for arable growers which supply the industry. The Renewable Energy Association warned that the deal could enable U.S. producers, supported by U.S. tax credits, to sell into Britain at a cheaper rate than domestic suppliers can match. INEOS [RIC:RIC: closed its ethanol plant at its Grangemouth site in Scotland in January, blaming a reduction in demand for ethanol in Europe combined with increasing pressure from imports of ethanol from other regions. Britain's concession on ethanol and beef was made in return for the U.S. removal of 25% additional tariffs on steel and aluminium, and a quota of 100,000 cars at a duty of 10%. Remaining tariffs were unchanged. British Prime Minister Keir Starmer said the deal would save jobs in the car and steel industries.
Business of Fashion
29-04-2025
- Business
- Business of Fashion
Primark Committed to US Expansion Despite Tariff Uncertainty, Says Boss
Associated British Foods' Primark clothing retail business is committed to expanding in the United States despite President Donald Trump's erratic approach to tariffs, its boss said on Tuesday. Primark's US business accounts for about 5 percent of the unit's total sales. It currently trades from 29 stores in the US and has signed an additional 18 leases. Trump's stream of tariff announcements, roll-backs and exemptions has left some firms wary of committing to expansion. However, AB Foods chief executive George Weston said Primark was 'absolutely' committed to a plan to have 60 US stores by 2026 and remains confident it can succeed in a market that has been a graveyard for some of Britain's biggest retailers, including Marks & Spencer and Tesco. Weston told Reuters in an interview that Primark would take the '[tariff] hits where we have to take them and before we take more substantive actions wait to see where we really are.' But he said Primark could benefit from Trump's move to end the 'de minimis' duty exemption, which allows shipments worth less than $800 duty-free entry to the US and has helped companies like Shein keep prices low. 'De minimis imports in the US are very, very large, they supply a lot of Americans who don't know about Primark yet but are looking for value,' he said. 'With prices going up from this part of the trade, I wonder if some Americans might start going back to shopping centres to find value there.' Weston was speaking after AB Foods reported first half results. By James Davey; Edited by Paul Sandle Learn more: Primark Says CEO Marchant Resigned Over Inappropriate Behaviour The executive stepped down following an investigation into his behaviour toward a female employee, according to the fashion chain's owner AB Foods.
The Herald Scotland
29-04-2025
- Business
- The Herald Scotland
Primark promises no price hike despite rising costs
"We went nine years without moving prices before inflation forced us to change pricing a couple of years ago, but since then we have brought down the price of kids' clothing," said George Weston, chief executive of Primark owner Associated British Foods. "We haven't moved any more prices and are absolutely not planning to move any more. Hopefully we can keep them flat for another eight or nine years." Read more: He added there had been some benefit from weakness in the US dollar and benign cotton costs, while the company is "choosing to absorb" rising labour costs. Retailers and hospitality providers have been hit particularly hard by the increase in employers' national insurance contributions that came into effect at the beginning of this month, with a number warning of higher prices and job losses as a result. Primark has 187 British stores that generated 46% of sales in the first half of the financial year. Its next largest market is Spain and Portugal, where sales grew by by 18%, followed by France and Italy (up 4%), Northern Europe (up 1%), the US (up 17%) and central and eastern Europe (up 21%). Primark's overall sales grew by 1% to £4.47bn, aided by new store openings abroad. Commenting on the impact of the tariff farrago in its results statement, AB Foods cautioned that several countries could slide into recession as a result of US trade policy. Read more: 'Sentiment is unlikely to improve as markets continue to face uncertainty and instability following recent tariff announcements by the US, retaliatory actions by China and the risk of further tariff trade wars. 'Consumer confidence could deteriorate further as a number of countries, including the US, face the risk of recession that could increase individuals' debt problems.' The search for a successor to former Primark chief executive Paul Marchant is "underway", the company said yesterday. Mr Marchant resigned last month, admitting an "error of judgement", following an allegation by a woman about his behaviour in a social setting. Group revenues at AB Foods, whose food and ingredient brands include well-known favourites such as Kingsmill and Ryvita, dipped by 2% to £9.5 billion with adjusted pre-tax profit falling 10% to £818m as the performance at its sugar division turned sour. "A sharp fall in sugar prices saw the division turn loss-making, with underlying operating profits down more than £140m on last year," said Aarin Chiekrie, equity analyst at Hargreaves Lansdown. "The regulatory picture for its bioethanol plant, Vivergo, is making operations unviable too, and unless current discussions with the UK government are fruitful, ABF could be forced to close the plant, at least temporarily.' AB Foods has cut production at its Vivergo bioethanol plant in London and has threatened to close it unless the government steps in to change regulations. The business made an operating loss in the first six months of the financial year. The conglomerate's diversified business model was a boon during the pandemic and continues to benefit, with the grocery and ingredients divisions doing much of the heavy lifting in the first half of the year while retail and sugar struggled. Even so, analysts at AJ Bell said Primark's underperformance was "worrying" given that warm temperatures should have driven increased footfall into stores. 'They will be looking at whether they are getting the basics right – putting the right product in the right places at the right times and right price points to get people through the tills," analysts said in a note to investors. "It badly needs to arrest a loss of market share. 'Making life more difficult in terms of getting things on track is the recent departure under a cloud of Primark's longstanding CEO Paul Marchant. The chain badly needs someone permanent to provide it with direction for the future.'
RTÉ News
29-04-2025
- Business
- RTÉ News
AB Foods keeps annual guidance for Primark/Penneys unit but cuts sugar outlook
Associated British Foods has today reported a 10% fall in first-half profit, hurt by a loss in its sugar division, sending its shares lower in London trading. The group however kept its guidance for "low single digit" annual growth at its Primark/Penneys clothing unit, driven by new stores in continental Europe and the US, offsetting weaker sales in the UK and Ireland. First half sales at Primark, whose boss Paul Marchant resignedl ast month over inappropriate behaviour, rose 1% to £4.5 billion. "While we continue to assume our trading in the UK remains challenging in H2 2025, there have been some early signs of improvement in recent weeks," the company said. AB Foods said it expected its sugar business to make a full-year adjusted operating loss of up to £40m, reflecting persistent low European sugar prices, a loss at its UK bioethanol business, Vivergo, and challenges in Tanzania and South Africa. It said it was close to completing a review of its Spanish sugar business Azucarera, and it was considering mothballing or closing the Vivergo plant unless there were changes to UK bioethanol regulations. The group maintained guidance for its grocery, ingredients and agriculture businesses. It said adjusted operating profit, its preferred profit measure, was £835m in the six months to March 1, on flat revenue of £9.5 billion on a constant currency basis. Shares in AB Foods fell 8%, wiping out most of the 10% gain recorded so far this year. Primark committed to US expansion despite tariff uncertainty, says boss Meanwhile, Associated British Foods' Primark clothing retail business is committed to expanding in the US despite President Donald Trump's erratic approach to tariffs, its boss said today. Primark's US business accounts for about 5% of the unit's total sales. It currently trades from 29 stores in the US and has signed an additional 18 leases. Trump's stream of tariff announcements, roll-backs and exemptions has left some firms wary of committing to expansion. However, AB Foods chief executive George Weston said Primark was "absolutely" committed to a plan to have 60 US stores by 2026 and remains confident it can succeed in a market that has been a graveyard for some of Britain's biggest retailers, including Marks & Spencer and Tesco. Weston told Reuters in an interview that Primark would take the "(tariff) hits where we have to take them and before we take more substantive actions wait to see where we really are." But he said Primark could benefit from Trump's move to end the "de minimis" duty exemption, which allows shipments worth less than $800 duty-free entry to the US and has helped companies like Shein keep prices low. "De minimis imports in the US are very, very large, they supply a lot of Americans who don't know about Primark yet but are looking for value," he said. "With prices going up from this part of the trade, I wonder if some Americans might start going back to shopping centres to find value there," he added.
BreakingNews.ie
29-04-2025
- Business
- BreakingNews.ie
Weak sugar performance hits share price of Penneys owner
Penneys owner Associated British Foods reported a 10 per cent fall in first-half profit on Tuesday, hurt by a loss in its sugar division, sending its shares down 8 per cent in early trading. The group however kept its guidance for "low single digit" annual growth at its Primark clothing unit, which trades as Penneys in the Republic. Advertisement The predicted growth in Primark will be driven by new stores in continental Europe and the United States, offsetting weaker sales in the UK and Ireland. Sales at Primark, whose boss Paul Marchant resigned last month over inappropriate behaviour, rose 1 per cent to £4.5 billion (€5.3 billion). "While we continue to assume our trading in the UK remains challenging in H2 2025, there have been some early signs of improvement in recent weeks," the company said. AB Foods said it expected its sugar business to make a full-year adjusted operating loss of up to £40 million, reflecting persistent low European sugar prices, a loss at its UK bioethanol business, Vivergo, and challenges in Tanzania and South Africa. Advertisement Ireland Penneys opens first-ever standalone home store Read More It said it was close to completing a review of its Spanish sugar business Azucarera, and it was considering mothballing or closing the Vivergo plant unless there were changes to UK bioethanol regulations. The group maintained guidance for its grocery, ingredients and agriculture businesses. It said adjusted operating profit, its preferred profit measure, was £835 million pounds in the six months to March 1st, on flat revenue of £9.5 billion on a constant currency basis. Shares in AB Foods fell 8 per cent, wiping out most of the 10 per cent gain recorded so far this year.
