Weaker demand has put pressure on pricing as the company faces forex headwinds

Food ingredients business Tate & Lyle's (TATE) recent third-quarter update (21 February) saw an 11% decline in its Food & Beverage Solutions business as it was hit by a mixture of customer destocking and weaker consumer demand.

 

Foreign exchange headwinds are also having a negative impact, while contracts for 2024 have been more competitive due to softer demand.

Berenberg analyst Samantha Derbyshire observes: ‘Tate has selectively given back some extra margin to customers where it has a strong collaboration relationship and visibility on volume growth, in order to secure volumes with them for 2024. This has likely added to extra pricing pressure.’

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