Shares in bakery ingredients group Real Good Food (RGF), owner of Carluke-based jam maker R&W Scott, lost more than a fifth of their value this morning after it warned of a “significant” hit to profits because of a pricing dispute with one of its major suppliers.
The firm said its Napier Brown sugar distribution arm has complained to the Office of Fair Trading alleging that British Sugar – part of the Associated British Foods conglomerate – is abusing its dominant position, and the complaint has been referred to the new Competition and Markets Authority.
RGF said: “Earlier this month and following repeated threats, British Sugar temporarily withdrew supply of sugar to Napier Brown despite Napier Brown continuing to pay over 95 per cent of the imposed price while it sought a solution to the pricing dispute.
“Given that British Sugar has a monopoly in the supply of UK beet sugar, Napier Brown had no alternative but to pay the imposed price under duress in order to maintain supply to its customers.”
RGF said it was unlikely that the pricing dispute will be resolved in the near future, and the short-term impact on Napier Brown would be “significant”.
Shares in the group were down 13p, or 20.8 per cent, at 49.5p in early trading.