Premier Foods plc Premier Foods Renews Relationship with Mondelez (4260E)

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RNS Number : 4260E

Premier Foods plc

08 May 2017

For immediate release

Premier Foods plc

8 May 2017

Premier Foods plc ("the Company")

PREMIER FOODS AGREES RENEWED RELATIONSHIP WITH MONDEL Z INTERNATIONAL FOR STRATEGIC GLOBAL PARTNERSHIP FOR CADBURY CAKE

Premier Foods today announces it has signed 'Heads of Terms' for a strategic global partnership with Mondelēz International to renew the Company's long-standing licence to produce and market Cadbury branded cake and ambient dessert products. Once finalised, the new licence will run until 2022, with an option for the Company to extend this to 2025, subject to meeting certain performance criteria.

The partnership is expected to unlock new growth opportunities in an exciting range of markets beyond the core licenced territories of the UK, Ireland, Australasia and United Arab Emirates bringing the total number of licenced countries to 46. New potential markets include South Africa, Canada, Japan, China, India, Asia Pacific, Caribbean and additional countries in the Middle East. The Company is already developing plans to launch Cadbury cake in two new significant markets in 2017/18.

In addition, the partnership will provide for the possibility, subject to approval, to use the full range of Cadbury brands such as Flake, Crunchie, Caramel and Marvellous Creations, as well as the Oreo brand, opening the door to further growth opportunities in cake in the UK and overseas.

The strategic deal has been outlined in a detailed document known as 'Heads of Terms' which is then expected to be finalised in definitive agreements in the coming weeks and builds on the Company's successful relationship with Mondelēz International and Cadbury established for over 30 years. In recent years, Cadbury cakes have seen impressive growth in the UK and Australia and have also been launched in the UAE. Over one million Cadbury Mini Rolls are now being produced every day at the Company's manufacturing facility in Moreton, on the Wirral, which is expected to grow in the future.

Commenting on the renewed relationship, Gavin Darby, Chief Executive Officer, Premier Foods said:

"I'm delighted we're entering into a new long-term global partnership with Mondelēz International which will unlock exciting new growth opportunities for both partners.

This will give us a great platform to invest in developing the Cadbury cake brand in the UK and around the world and represents a major boost to our fast growing International business.

The new global partnership is good news for our colleagues and good news for British exports."

Glenn Caton, President of Northern Europe, Mondelēz International added:

"We are very proud of our long term partnership with Premier Foods and look forward to continuing to work together to nurture and develop our well-loved portfolio of brands and products. The future is bright for Cadbury cakes and for the people that love them."

 
 For further information please contact: 
 Richard Godden, Head of Investor           +44 (0) 1727 
  Relations                                  815 850 
 Richard Johnson, Corporate Affairs         +44 (0) 1727 
  Director                                   815 850 
                                            +44 (0) 1727 
 Maitland                                    815 850 
 Kate O'Neill 
 

Tom Eckersley

Additional Notes

1. This agreement in principle is based on a detailed set of non-binding Heads of Terms. In the coming weeks the parties intend to work together to conclude binding definitive agreements.

   2.   The commercial terms of these arrangements are not disclosed. 

3. Cadbury cakes have an estimated 8.3% share of the GBP1,013 million ambient cake market in the UK and have grown sales value 19.5% in the last two years (source: IRI Grocery outlets 52 weeks ending 22 April 2017)

This information is provided by RNS

The company news service from the London Stock Exchange

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May 08, 2017 02:04 ET (06:04 GMT)