UPDATE: Kraft Euro Boss Takes Over At Premier Foods

Premier Foods PLC (PFD.LN), the U.K.'s largest food producer which is battling rising commodity prices and waning consumer demand, said Thursday that former Kraft Europe president Mike Clarke will take the reins when its current chief executive steps down in September.

Clarke--a leading industry figure who has also worked at Coca-Cola Co (KO) and Reebok--led the integration of U.K. chocolatier Cadbury into the Kraft stable, following the GBP11.5 billion takeover in January last year.

He joins Premier as it wrestles with rising commodity prices, which jumped 14% in the six months to June 30--equivalent to a GBP150 million cost increase. The jump led Premier to downgrade its fiscal half profit forecasts by around 20% last month.

He will also have to contend with pressure from the U.K.'s supermarkets, which have doggedly resisted efforts by Premier to pass on commodity price increases. The company had a high profile fallout with Tesco PLC (TSCO.LN) in October last year, which led the supermarket giant to briefly remove Premier's Hovis sliced bread from its shelves.

Panmure Gordon analyst Damian McNeela said Clarke's appointment may give Premier a chance to reduce any lingering bad blood following the dispute.

"A change at the top should be able to draw a line under the issue," he said.

He expects the appointment to be well received by the market, saying, "his pedigree gives him the experience and expertise to deal with the brands side of Premier".

Credit Suisse analysts described the appointment as "quite a coup", owing to Clarke's experience at Kraft, where he is credited with restoring both sales and profit growth, and handling the consolidation of its corporate headquarters in Zurich.

"With a CV that includes stints at Reebok, Coca-Cola and most recently head of Kraft Europe, Premier might reasonably lay claim to having landed a leading industry player," they said in a research note.

Clarke joined Coca Cola in 1996 as part of the fruit juice brand Minute Maid, later rising to lead the company's northwest European business unit, covering regions including Great Britain, France, and Sweden.

Premier is behind household brands including Oxo stock cubes, Mr Kipling cakes and SAXA Salt. The company estimates that 99% of U.K. households buys one or more of its products every year.

CEO Robert Schofield, who has been at the company for nine years, is retiring in September.

At 0945 GMT, Premier shares were up a penny, or 6.7%, at 19 pence, valuing the company at around GBP445 million.

-By Mario Christodoulou, Dow Jones Newswires; 44-20-7842-9479; Mario.christodoulou@dowjones.com

Premier Foods (LSE:PFD)
Historical Stock Chart
From Jun 2024 to Jul 2024