Associated British Foods’ planned separation of Primark from its food, ingredients, agriculture and sugar operations is expected to create two distinct businesses, but the performance of the remaining food group will be an important part of the story.
The demerger, announced in April, is planned for December 2027. The food business will retain brands including Twinings, Ovaltine, Ryvita and Jordans, alongside ingredients, agriculture and sugar operations.
The split is intended to give each business a clearer identity and allow management to focus on its own priorities. But separation alone will not solve the operating challenges facing the group.
Reuters reported on 29 October that investors are looking for a recovery in Primark’s sales growth and a return to profit in sugar. AB Foods has forecast sugar operating losses of up to £60 million in 2025/26 and up to £170 million in 2026/27.
For grocery suppliers and retailers, the proposed structure matters because it could change the way the food business allocates capital and presents its priorities to investors. A more focused company may have a clearer investment case, but it will still need to deliver growth and manage input costs.
The real test will come after the split: whether the food group can turn its brand portfolio and industrial operations into a more consistent earnings story.
