The agency has stopped working with Ferrero, the Italian owner of the brand, in the UK after what is said to have been a difficult 30-month relationship.
It is unclear whether the £5 million account will be put up for pitch or be assigned either to WCRS or Leagas Delaney, both of which have Ferrero business.
Sven Olsen, the managing director of Banks Hoggins, would not elaborate on the split, saying only that "the agency has declined to pitch for the business". Neil McIntosh, the Ferrero UK marketing director, was unavailable for comment.
It is believed that matters came to a head at a meeting between the client and the agency last week to discuss the findings of new research for the brand.
The split marks a final parting of the ways, Banks Hoggins having been relieved of Ferrero's £2.5 million Tic Tac account in January in favour of WCRS.
Banks Hoggins was assigned the Ferrero Rocher account in October 1999 in a move marking the end of the "ambassador's party
ad - often cited as the worst TV commercial ever made.
The agency produced a new campaign with the line "Give Ferrero Rocher ... grudgingly
and featuring a crafty hostess' attempts to keep the Ferrero Rocher from her guests because she doesn't want them all to be eaten.
The agency also adopted a radically different approach when it was awarded the Tic Tac business. A succession of unmemorable in-house pan-European campaigns were replaced by a small man in a white suit and his statuesque girlfriend.
However, it is understood that new work has been difficult to get past the family owned confectionery giant, whose brands also include Kinder Surprise and the Kinder Bueno chocolate bar, and which has firm views on how they should be promoted. "It won't tolerate creative debate,
an insider said.
Recently, Ferrero's burgeoning number of product lines have resulted in agency assignments becoming increasingly project-based. It has also been eager to find ideas which can run across a number of markets.
"Ferrero is a complex and bureaucratic client with long chains of command,
an industry source said. "It's not massively marketing focused and its people aren't used to dealing with agencies."
Ferrero Rocher's last significant TV presence was at Christmas with a commercial in which the hostess does battle in the kitchen with her selfish alter ego over whether the box should be shared.