Blow for Uniq as pension plan rejected

The group's shares plummeted by 27 per cent after the watchdog said the funding scheme "does not meet all of its criteria for clearance".

Uniq warned in April the outcome of the process "will have a fundamental impact, either positive or negative, on the pension scheme and on shareholder value".

The company, which supplies Marks & Spencer and The Co-operative, is battling to plug a 436m deficit – a hangover from its previous incarnation as dairy giant Unigate, with former milkmen among the 21,000 member scheme.

Shares have lost more than half their value since April due to investor fears over the pensions fund and the response of the watchdog.

The group, which is headquartered in Gerrards Cross, stressed yesterday it expected the issue to take some time to resolve.

It had put forward what it claimed was an "innovative" plan to deal with the pension woes, involving limiting liability payments to 5m a year until 2013.

It wanted to then resume direct contributions to the scheme on the basis of its ability to pay, at either a third of earnings before interest, tax, depreciation and amortisation, or 10m a year, whichever is higher.

The group's 13m market capitalisation is dwarfed by its pension liabilities.

It is also suffering significant losses, reporting in April that overall annual group pre-tax losses widened to 18.5m from continuing operations as 11.3m of pension expenses weighed.

However its UK division saw profitable growth for the year to December 31, with trading operating profit of 4.4m compared with a loss of 1.3m the previous year.

The company employs around 2,200 people and manufactures its products in four sites at Minsterley, Spalding, Evercreech in Somerset and Northampton.

Uniq has sold businesses in France, Holland, Germany and Poland in recent years to concentrate on desserts and 'foods to go' such as sandwiches and wraps in its UK business.