26th Jun 2025 09:39
(Alliance News) - Associated British Foods PLC on Thursday said it is in discussions for the orderly wind-down of its bioethanol business, Vivergo Fuels, as it lamented the impact of the recent US-UK trade deal.
The London-based food processing and clothing retailing conglomerate said the commercial viability of Vivergo had been under pressure, as detailed in its interim report back in April, and owing to the manner in which the UK government was regulating imported ethanol.
AB Foods explained that the recent trade deal inked with the US has made the situation "significantly worse", permitting the entry of tariff-free US ethanol into the UK.
Discussions with Westminster on a regulatory and financial solution lapsed on Wednesday, AB Foods said, though it noted the government has committed to formal negotiations to find a solution, recognising "the strategic importance of a domestic ethanol supply".
Even so, AB Foods said it is currently in discussions regarding a wind-down of Vivergo, the UK's largest producer of bioethanol, since there is no guarantee of the outcome of these negotiations.
"Unless the government is able to provide both short-term funding of Vivergo's losses and a longer-term solution, we intend to close the plant once the consultation process has completed and the business has fulfilled its contractual obligations. We would cease all manufacturing before the end of our financial year" on September 13, AB Foods said.
The company also updated on its Spanish sugar business, Azucarera, saying it has completed its operational review, with the division commencing restructuring last month. It noted a reduction in its sugar beet manufacturing footprint, "which will simplify its manufacturing operations, reduce cost and improve efficiency".
AB Foods left guidance for its Sugar business in financial 2025 unchanged. Back in April, AB Foods had said it expects the Sugar division to have an adjusted operating loss of as much as GBP40 million.
Shares in AB Foods were up 0.6% at 2,049.00 pence on Thursday morning in London.
By Christopher Ward, Alliance News reporter
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