Disposal of Tea Business

Premier Foods plc
13 October 2005

13 October 2005

       Premier agrees disposal of tea business to Apeejay Surrendra Group

Premier Foods plc ('Premier') announces that it has agreed to sell its tea
business to Apeejay International Tea Limited, a subsidiary of the Apeejay
Surrendra Group ('Apeejay'), for £80 million. The consideration will be paid in
cash and the transaction is expected to complete shortly. Premier will use the
proceeds to reduce net debt.

The business being sold includes the Typhoo, London Fruit & Herb, Lift and other
associated brands, own label contracts and Premier's tea blending and packing
facility at Moreton, Wirral, which employs 249 people. In the year to 31
December 2004 the tea business had net sales of £70.2 million and operating
profit of £11.2 million after estimated attributable administrative overheads(1)
The book value of the assets being sold was £25.7m at 2 July 2005.

Premier and Apeejay have entered into agreements whereby Premier will provide
services to Apeejay following completion, including transitional commercial and
administrative support, logistics and the manufacture of Lift and Typhoo QT
instant teas.

Robert Schofield, Chief Executive of Premier, said:

'Typhoo is a great brand but after a thorough review we believe it will benefit
from the focus and investment a vertically integrated tea business like Apeejay
can bring. Our strategy is to drive growth through the active management of our
brand portfolio focusing on those brands with leading market positions.'

Reclassification of product groups

As a result of this sale, Premier's remaining beverages business including the
Cadbury manufacturing licence will be incorporated into the Spreads and Desserts
product group. Following the disposal, the 2004 pro forma branded sales mix of
the group will drop from 61% to 59%(2). A pro forma product group sales and
operating profit analysis with IFRS adjustments is attached as appendix 1 to
this announcement.

Premier will be hosting a teleconference call for analysts at 9.30am on 13
October 2005 on 020 8322 3331. This will be available for replay for 7 days on
020 7081 9440, account number 801102, recording number 311050.

A live audio webcast of the presentation can also be accessed via the Premier
website www.premierfoods.co.uk at 9.30am on 13 October 2005. Analysts wishing to
ask questions must dial in on the teleconference to do so. Please note that the
Q&A session of the presentation will not be available on the webcast.

1.       The estimated attributable overheads is that element of the group's
administrative overheads that will either transfer to the purchaser on
acquisition or be eliminated by Premier following the transaction.

2. Pro forma for the acquisition of the Bird's and Quorn businesses and the
disposal of the tea business.

For further information, please contact:

Premier Foods plc                 Tel: [phone]
Paul Thomas, Finance Director
Robert Lawson, Director of Mergers & Acquisitions and Investor Relations
Gwyn Tyley, Investor Relations Manager

Citigate Dewe Rogerson            Tel: [phone]
Sara Batchelor
Anthony Kennaway



Notes to editors

Brands being disposed
Launched in 1903 by Birmingham grocer John Summer, Typhoo has been waking the
nation with its favourite cuppa for nearly 100 years. Today, Typhoo is one of
Britain's favourite teas.

As well as producing original tea bags and producing the UK's number one
decaffeinated tea, there are a number of other alternatives in the Typhoo range
with 'Typhoo Fruit & Herb', 'Typhoo Green Tea' and 'Typhoo QT' instant white
tea.

Other brands included in the sale include the London Fruit & Herb, Natureland
and Heath & Heather fruit and herb tea brands for the export and health food
markets and Freshbrew, Glengettie, Melroses and Ridgeways regional and
speciality teas.

History
Premier, then Hillsdown Holdings plc, acquired Typhoo together with a number of
other brands in 1989 when it acquired Premier Brands Limited. Premier Brands
Limited was formed in 1986 when a management buyout team acquired the business
from Cadbury Schweppes plc. The Lift instant tea business was acquired by
Premier in 2001 from Northern Foods plc.

Recent results

Premier reported interim results for the six months to 3 July 2005 on 6
September. The highlights of these are shown below:

                    Six months to     Six months to
                    3 July 2004         2 July 2005

                            £m              £m          Change

Turnover*                 409.2            425.8         -3.9%
Trading profit*,**         45.6             38.4         18.8%
Operating profit*          42.8             39.0          9.7%
Profit/(loss) before tax   18.3              0.2            na
Operating cash flow        61.1             58.9          3.7%

* Continuing operations
**Trading profit is defined as operating profit before exceptional items,
amortisation of intangibles and the effective income statement impact of changes
in pension assumptions.

   • Trading profit up 18.8%

   • Like for -for-like operating profit up 5.4%

   • Continued focus on growth of brands: Branded sales now 56% of grocery
     sales

   • Bird's and Quorn acquisitions performing to expectation

   • Cost savings programme delivering

   • Interim dividend of 4.75 pence per ordinary share

Apeejay Surrendra Group
The Apeejay Surrendra Group, founded in 1910 and headquartered in Calcutta, is
one of India's largest groups and has a diversified portfolio of businesses with
interests in tea, hospitality, retail, shipping, financial services and
property. Apeejay's tea operations are directed through two principal tea
companies, Apeejay Tea Limited and Empire & Singlo Tea Ltd, which have been in
operation for over 100 years and are amongst the oldest tea companies in India.

Apeejay Tea is amongst the largest producers in India with a workforce of over
40,000 and 17 estates producing over 21 million kilograms of tea from a
plantation area of over 30,000 acres. Three of its single estate teas - Sessa,
Pengaree and Khobong - are sold in Harrods and other premium tea boutiques
across the world. Apeejay Tea also sells its teas through its own premium tea
boutiques, Flurys and Cha bar, and via teastall.com.  For more information visit
www.apeejaygroup.com.

Appendix 1

Interim 2005
              Sales    Trading   EBITA Amortisation Exceptional      EBIT
                       profit                         items
                £m       £m       £m       £m           £m           £m
CPS&Q         186.4     14.0     14.0     (0.5)         1.5         15.0
SD&B          131.9     24.8     24.8     (1.8)        (0.2)        22.8
Grocery       318.3     38.8     38.8     (2.3)         1.3         37.8
Potatoes       58.3      1.1      1.1      0.0         (1.3)        (0.2)
Continuing    376.6     39.9     39.9     (2.3)         0.0         37.6
Discontinued   32.6      5.7      5.7     (0.3)        (0.2)         5.2
Total         409.2     45.6     45.6     (2.6)        (0.2)        42.8

Interim 2004
           Sales    Trading  Changes  EBITA Amortisation  Exceptional     EBIT
                    profit   Pension                         items
                            assumptions


               £m       £m      £m       £m       £m           £m           £m
CPS&Q       181.1      9.7     2.3     12.0     (0.5)         0.8         12.3
SD&B        119.4     22.1     1.1     23.2     (0.9)         0.6         22.9
Grocery     300.5     31.8     3.4     35.2     (1.4)         1.4         35.2
Potatoes     88.9      2.8     0.0      2.8      0.0         (0.6)         2.2
Continuing  389.4     34.6     3.4     38.0     (1.4)         0.8         37.4
Discontinued 86.1      5.9     0.4      6.3     (0.5)        (2.3)         3.5
Total       475.5     40.5     3.8     44.3     (1.9)        (1.5)        40.9

Full year 2004

           Sales    Trading  Changes  EBITA Amortisation  Exceptional     EBIT
                    profit   Pension                         items
                            assumptions


               £m       £m      £m       £m       £m           £m           £m
CPS&Q        374.8    35.4     3.6     39.0     (0.6)        (2.8)        35.6
SD&B         246.9    52.8     1.9     54.7     (1.7)        (6.5)        46.5
Grocery      621.7    88.2     5.5     93.7     (2.3)        (9.3)        82.1
Potatoes     150.3     5.7     0.0      5.7      0.0         (6.5)        (0.8)
Continuing   772.0    93.9     5.5     99.4     (2.3)       (15.8)        81.3
Discontinued 124.8    13.4     0.6     14.0     (0.7)         5.4         18.7
Total        896.8   107.3     6.1    113.4     (3.0)       (10.4)       100.0


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