Premier Foods owned Hovis could be sold after the owners ended a £75 million contract with a unnamed supermarket due to untenable margins.
Premier has also announced yesterday that it has increased cost cutting targets from £20 million to £60 million in light of poor margins.
Michael Clarke, chief executive at Premier Foods, called the supermarket contract “costly to service”.
The company is carrying out a review of its bread division including the Hovis brand which is facing pressure from rising competition and ingredient costs including a 30 percent rise in wheat prices.