British Sugar development

Associated British Foods PLC
04 July 2006

                          Associated British Foods plc



   Associated British Foods announces further plans for the development of 
                                 British Sugar




For immediate release                                        4 July 2006


Associated British Foods plc ('ABF'), the international food, ingredients and
retail group has today announced further plans for the development of British
Sugar.


It is proposing to close its York and Allscott beet sugar factories after the
end of the 2006/7 campaign and consolidate processing at its remaining four
factories in the UK.  In addition, it has confirmed its intention to purchase
the 83,000 tonnes of additional sugar quota available in the UK as a result of
reform of the EU sugar regime.


These developments follow the consolidation of British Sugar's Polish operations
into two factories last year and the application to acquire 11,000 tonnes of
additional sugar quota available in Poland.  Together these will reinforce
British Sugar's position as the lowest cost processor in the EU beet sugar
industry.


An exceptional charge of around £93 million will be made in the consolidated
income statement for the year ending to September 2006 comprising £66 million of
asset write-down and £27 million of estimated cash costs associated with the
reorganisation.  These costs will be excluded from the calculation of adjusted
earnings.  The investment in additional quota in the UK and Poland is expected
to cost £47 million dependent on exchange rates and success in securing the
targeted volumes.  This cost will be capitalised and amortised over nine years.


George Weston, Chief Executive of Associated British Foods, said,

'We intend ultimately to produce more sugar from four UK factories than we
currently produce from six.  This development, together with the recently
announced collaboration with BP and DuPont to build the UK's first commercial
biobutanol plant and the proposed acquisition of a controlling interest in
Illovo Sugar Limited, the largest cane sugar producer in Africa, represent a
significant investment in the future of the group's sugar operations.'



For further information please contact:


Associated British Foods

John Bason, Finance Director                      Tel: [phone]
Geoff Lancaster                                   Tel: [phone]

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




Notes to Editors


Associated British Foods is a diversified, international food, ingredients and
retail group with sales of £5.6 billion and over 42,000 employees in 41
countries.  The group is one of Europe's largest food companies and has
significant businesses in Australia, China and the US. It is the largest
purchaser of agricultural products, including grain and sugar beet, and the
leading supplier of animal feeds in the UK.



British Sugar is the UK's leading supplier of sugar products to the food
manufacturing and consumer markets.  It is recognised as the most efficient
sugar producer in Europe and has considerable expertise in asset utilisation,
energy efficiency and process technology.  British Sugar has operations in
Poland and China with considerable experience in operating in developing
countries and in joint venture operations.








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