Italian food group Barilla has put German baking business, Lieken, up for sale.
In its latest set of results for fiscal 2011 Barilla said that while its bottom line improved thanks to lower one-off charges, margins have come under pressure from rising input costs. The top line is also feeling the impact of wider economic issues that have meant Barilla has been loathe to pass these higher costs along to consumers, as pricing action would surely hit volumes.
In this context, it should perhaps come as little surprise that the firm has chosen to shed this non-core business in order to "free up resources" to "continue to invest" in its core businesses, including its number one pasta brands in Italy and the US.
The disposal also comes at a time when the European baking sector is entering a period of consolidation, as evidenced by Dutch ingredients and baking group CSM's move to sell-off its baking interests last month. In order to lead this process, companies will need to invest heavily in their baking operations - something that Barilla is clearly unwilling to do.
