Unilever divests UK edible oils

Edible oils market in the UK undergoes change as Anglo-Dutch conglomerate Unilever announces plans to divest its seed oils and cooking fats business to canned fish and meat firm Princes.

The transaction does not involve margarines but solely the oil and cooking fat businesses.

The UK oils market is split into olive oils worth about £70m, and specialty oils at £7 million.

Under terms of the deal, Princes will acquire the cooking oil brands Crisp 'n Dry and Mazola together with the cooking fat brands, Spry Crisp 'n Dry and Cookeen from Unilever UK Foods.

The brands will join sunflower oil brand Flora and blended vegetable/olive oil brand Olivio that Princes already licenses.

Tim Jolly, chief executive of Princes Manufacturing, said: "This acquisition brings six leading brands into the Princes portfolio and establishes the company in the UK seed oil and cooking fats sector."

According to Unilever, the sale is part of its strategy to focus on fewer bigger brands.

In March 2004 Unilever sold its food oils brands in Mexico to UK firm Associated British Foods.The $110 million (€88m) cash deal saw Capullo bottled canola oil, Mazola edible oil and Inca white fat, that had combined sales of $124 million (€100m) in 2003, falling into the ABF stable through its US subsidiary ACH Food companies.

In the global vegetable oil market, rape seed, palm oil and soybean are all experiencing strong market growth as food makers continue to turn away from animal fats in favour of vegetable alternatives.

By 2008 analysts Business Communications Company predict these key vegetable edible oils will account for 69.9 per cent of the US market alone.

Today, soybean oil - together with palm oil - accounts for over half of all oil consumed in the world. Rape seed also enjoys a strong share of the market but in recent months supplies, and prices, have been severely impacted by a pulling of stocks from China and a dip in supplies due to poor harvests.

But health concerns are currently pushing the market for soybean oil further forward as ongoing research suggests soy not only lowers cholesterol, but can also have a preventative effect on breast cancer and other hormone-related cancers. Both the UK and the US have approved a health claim for soy.