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Highlights

  • ABF begins consultation on potential wind-down of Vivergo bioethanol plant.
  • The company’s Azucarera reduces beet manufacturing to a single Spanish facility.
  • ABF shares up 0.25% to GBX 2,042.00 as of 26 June 2025.

Associated British Foods plc (LSE:ABF) is a diversified international food, ingredients, and retail group. Its operations span a range of sectors including grocery, sugar, agriculture, ingredients, and clothing retail through its Primark brand. The Sugar segment operates under various brands including British Sugar, Illovo in Africa, Azucarera in Spain, and Vivergo in the UK.

The company has issued an operational update for its Sugar business, outlining uncertainty surrounding its bioethanol unit Vivergo and changes to its Spanish sugar operations under the Azucarera brand. Despite these developments, ABF has maintained its full-year guidance for the Sugar division.

The update follows a deadline set by ABF for the UK Government to offer regulatory and financial support to sustain Vivergo’s operations. That deadline passed without resolution, prompting the company to begin a consultation process with employees regarding a possible closure of the plant.

ABF stated in April 2025 that the economic viability of Vivergo, its UK-based bioethanol business, was being adversely affected by how the UK Government applied regulations to imported ethanol. Since then, the situation has worsened following the announcement of a new trade deal between the UK and the United States, which allows tariff-free imports of US ethanol.

According to ABF, this has created a further imbalance in the market. While the Government has acknowledged the strategic importance of domestic ethanol production and committed to formal negotiations, the company is proceeding with internal steps in case those talks fail.

As of now, Vivergo has ceased wheat purchases (effective 11 June) and initiated consultations with staff to begin an orderly wind-down. Unless the UK Government offers both short-term funding to cover current losses and a viable long-term regulatory framework, ABF has stated its intention to close the plant before the end of the financial year on 13 September 2025.

Meanwhile, ABF has concluded the operational review of its Spanish sugar unit Azucarera, which was previously flagged in its interim results. The restructuring process began in May and has resulted in a reduction in the company’s beet sugar manufacturing footprint.

Operations will now be consolidated to a single facility in northern Spain; a move ABF says will streamline processes and cut costs. The decision forms part of wider efforts to increase operational efficiency across its Sugar business amid changing market dynamics.

In Africa, high rainfall has delayed the start of the sugar processing season, affecting early-year production. However, ABF notes that the peak profit period in the region typically occurs in the final two months of the financial year. To mitigate initial losses, production is currently running at increased capacity.

Despite the disruptions across the UK, Spain, and African operations, ABF has kept its guidance for the Sugar segment unchanged for the full 2025 financial year.

As of 26 June 2025, ABF shares were trading 0.25% higher at GBX 2,042.00.