Trading Update

Associated British Foods PLC
11 September 2006


11 September 2006
                          Associated British Foods plc

                        Pre Close Period Trading Update


Associated British Foods plc issues the following update prior to entering its
close period for its full year results to 16 September 2006, which are scheduled
to be announced on 7 November 2006.

At the time of the announcement of the interim financial results in April, the
Chairman stated that he expected some reduction in earnings after tax in the
second half of our financial year.  This would result from the impact of price
pressure in the first half in our EU sugar businesses, adverse trading
conditions in our bakery operations and higher energy costs.  The reduction in
earnings will be in line with our expectations.

Primark has delivered very strong sales and profit growth in the second half.
The programme for the refit and opening of the former Littlewoods stores is on
schedule with the expectation of 18 stores trading at the financial year end.
Including these stores, and our first store in Spain, 20 stores will have been
opened in the second half.  They are trading well.  Following the closure of 3
smaller stores, the total number at the year end will be 143 trading from 3.5m
sq ft of retail selling space, an increase of 40% over the year.  Like-for-like
sales growth is expected to be over 3% for the full year with second half
like-for-like sales in line with the second half of last year when exceptionally
strong like-for-like growth of 12% was achieved.  This measure excludes new and
extended stores for their first year of trading and consequently only covers
trading in a little over half of the current selling space.  79 of the former
Littlewoods stores were not required and at the year end 69 of these have either
been sold or are under offer and proceeds of £145m will have been received.
Negotiations for the sale of the remainder are continuing.

In British Sugar, the imbalances in supply and demand within the EU sugar market
and changes in producer behaviour in anticipation of the new regime in the first
half resulted in price pressure.  However, the impact of these factors in the
second half has been in line with our expectations.  Next year, sugar supply in
the EU will be substantially lower as a consequence of a likely smaller crop and
the temporary quota cut already announced by the EU commission. The smaller crop
in the UK is, however, still expected to meet quota, including the additional
quota purchased.   Our estimate of the reduction in operating profit in the next
financial year as a result of the introduction of the restructuring levy, net of
the benefit of the reduction in beet price, and the smaller crop remains
unchanged.

Since the interims we have announced a number of initiatives which represent a
significant investment in the future of our sugar operations.  The acquisition
of a 51% interest in Illovo Sugar Limited, the largest sugar producer in Africa
and one of the world's leading low cost producers, completed on 4 September 2006
for a cash consideration of £286m (R3.8bn).  A full year's trading will be
consolidated into next year's income for the group.  Well over half of our sugar
production next year will be outside the EU.  In July, we announced our
intention to purchase additional quota in the UK and Poland and the closure of
factories in York and Allscott at the end of the 2006/7 campaign.   Together
these will increase the efficiency of our EU operations.  An exceptional charge
to cover the costs of the factory closures will be made in this financial year's
income statement and will be excluded from the calculation of adjusted earnings.
  In June, a collaboration with BP and DuPont on UK biofuels was announced and
discussions are continuing to develop detailed plans for production.

In Grocery, Twinings, Ovaltine, Ryvita, Capullo in Mexico and Westmill all
achieved strong profit growth.  ACH performed well although Mazola volumes
continued to be down in a declining oils category.  Profit at Silver Spoon was
affected by pricing pressure on granulated sugar.  In Australia, there are
encouraging improvements in the operation of the new Sydney bakery.  However,
trading has been particularly difficult at Allied Bakeries with lower volumes of
both Kingsmill and own label significantly reducing profitability.  The new
management team is making progress in dealing with the issues in the business
and two new Kingsmill products were launched in the summer.  We expect the
substantial increase in wheat and energy costs to be recovered next year by
bread price increases.

The good progress reported by AB Mauri in the first half continued and high
energy costs were offset by strong sales growth in both yeast and bakery
ingredients to deliver further profit improvement.

As expected, interest payable, net of investment income, will be considerably
higher than last year.  However, the recent weakening of the US dollar, which
has reduced the operating profit of US dollar earnings on translation, has
benefited the interest payable on our US dollar borrowings.  The spend on
acquisitions in the year will be some £400m which is mainly Illovo.


For further enquiries please contact:

Associated British Foods
John Bason, Finance Director                             Tel: [phone]

Citigate Dewe Rogerson
Jonathan Clare, Chris Barrie, Sara Batchelor             Tel: [phone]


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