Premier Foods "does not charge agencies" for roster places

Premier Foods, which owns Hovis, Mr Kipling and Ambrosia, has rejected claims from the Marketing Agencies Association (MAA) that it asked an agency to pay £40,000 to remain on its roster.

Hovis: owner Premier Foods denies charge claim
Hovis: owner Premier Foods denies charge claim

The MAA last week spoke out against advertisers that demand upfront fees from their agencies, and singled out Premier Foods after one medium-sized agency was told to contribute more than £40,000.

A spokeswoman for Premier Foods said: "We would like to point out we do not charge agencies to be on our roster."

The spokeswoman confirmed the company had asked for an "investment payment" from suppliers to confirm "their desire to remain a strategic supplier in the future".

It is understood that all of Premier Foods’ agencies, which include JWT London, McCann London and Starcom MediaVest Group, have been approached with the request.

Although a spokeswoman for Premier Foods insisted the money was an investment, rather than a payment, agencies do not get any equity in the company in return.

The request is part of a supplier review by Premier Foods. The company plans to cut costs after selling off business like Branston Pickle to focus on its self-titled "power brands" like Hovis and Ambrosia. It aims to halve the number of third parties it works with by 2014.

The Premier Foods spokeswoman said: "Focusing on fewer, more strategic supplier partnerships will enable us to identify more ideas to drive mutual growth.

"As a first step we are asking our suppliers for an investment payment to demonstrate their support for the business and their desire to remain a strategic supplier in the future.

"Discussions with a wide range of our suppliers have been very positive. They understand that if they support us to grow, they will also benefit too."

Premier Foods reported a pre-tax loss of £23.5 million for the half-year ending 30 June 2013, although this was half its losses from the previous six months.