Pre Close Trading Update

Associated British Foods PLC
25 February 2008



                          Associated British Foods plc

                        Pre Close Period Trading Update



Associated British Foods plc issues the following update prior to entering the
close period for its interim results to 1 March 2008, which are scheduled to be
announced on 22 April 2008.



In our interim management statement issued on 17 January 2008 we reported that
trading in the first 16 weeks had been fully up to our expectations.  This trend
has continued and our interim results will show good growth in the group's
adjusted operating profit over the same period last year.  Strong growth in
Agriculture, Grocery and Primark more than offset the expected, and previously
reported, decline in Sugar.



Recent investments, higher working capital and higher interest rates have
increased the group's net financing costs.  However, this impact will be largely
offset by the lower underlying tax rate of 25% compared with 27% in the first
half last year.   Adjusted earnings will show good progress.



The income statement will include an exceptional gain of £16m following our
decision to renounce permanently sugar quota in the UK and Poland.  This
comprises the compensation receivable from the EU restructuring fund less both
the write-off of the unamortised cost of quota purchased in 2006 and costs
relating to the closure of the York and Ostrowite factories.



During the half year we will have spent some £120m on acquisitions, primarily on
certain of the European assets of Gilde Bakery Ingredients for AB Mauri and on
the beet sugar factories in north east China.  At the half year the group's net
debt will reflect these investments, the higher working capital in Sugar
expected at this time of year and higher working capital elsewhere resulting
from the effect of substantially higher commodity prices on stocks.



Sugar & Agriculture

Sugar profit in the UK and Poland will be much lower than last year mainly as a
result of the further effects of the EU sugar regime changes.  The restructuring
levy per tonne has been increased from €126 last year to €173 this year and the
temporary reduction of quota increased from 152,000 tonnes to 191,000 tonnes.
In the UK, profit was also impacted by higher energy costs and a smaller crop of
1.05 million tonnes which was affected by heavy mid-summer rains.  Poland had an
exceptionally good campaign with total production estimated at 227,000 tonnes
and Glinojeck again set new operating records.  The recent strengthening of the
euro has benefited both businesses.



The European Commission has announced that a total of 2.6 million tonnes of
sugar quota has been permanently renounced across the EU in the first phase of
its enhanced restructuring scheme.  This brings the total quota for sugar,
inulin and isoglucose renounced to date to 4.8 million tonnes which is a
substantial move towards the target set by the Commission.  The second, and
final, phase renunciation is expected to be announced at the end of March.  As
part of the first phase British Sugar has received confirmation that its
application to renounce permanently 191,000 tonnes of UK and Polish sugar quota
from October 2008 has been accepted.  The financial consequences will be shown
as an exceptional net gain of £16m.  As anticipated there will be relief from
the restructuring levy on the renounced quota in the 2007/8 marketing year
amounting to £25m.



At Illovo, profits will be lower than the same period last year.  Sugar
production was impacted by very high rainfall making it impossible to harvest
all available cane at the end of the season.  Volumes in both South Africa and
Zambia are lower than previously forecast although the total sugar production
estimate of 1.8 million tonnes is still above the previous year.  Operating
performance was positive with good plant availability and sugar extraction in
most areas.  The capacity expansion in Zambia is progressing well.



The recent frosts in southern China will affect sugar production from our cane
sugar business although the consequently firmer prices will have some mitigating
effect on profit.  Construction of a new cane sugar mill in Jianchenjiang with a
capacity of 120,000 tonnes will be completed at the end of this year and will
enable further growth.  Eleven beet sugar factories have now been acquired in
north east China and the campaign is progressing well with production of some
240,000 tonnes of sugar expected.



Agriculture performed extremely well with revenue up and profit sharply ahead of
last year.  Strong trading in the markets for cereals, nitrogen based
fertilisers and other crop inputs led to an excellent result from Frontier.
Further investment enabled KW Trident to benefit from high demand for sugar beet
feed and co-products from the cereal, distilling and brewing sectors.  However,
in China, recovery of the dramatic increase in the cost of raw materials and
energy has proved challenging.



Grocery

Grocery profits will be much higher than the same period last year, primarily as
a result of a substantial improvement by Allied Bakeries but also due to strong
performances from Twinings Ovaltine and George Weston Foods in Australia.  The
UK bakery business benefited from the continued improvement in operational
performance, higher volumes and achievement of price increases that recovered
the higher wheat costs.  In Australia, the results also reflect improvements in
bakery performance and successful recovery of higher wheat costs.  Twinings
Ovaltine again delivered strong sales growth, particularly from tea in the UK
and US and from Ovaltine in Asia and developing export markets.



As expected profit at ACH has been impacted by sharp increases, to unprecedented
levels, in the cost of corn, soy bean and canola oils.  Price increases have now
been achieved with further initiatives planned.  The combination of Patak's and
Blue Dragon is on plan, trading is encouraging and the new Blue Dragon factory
in Poland is being commissioned.  Grocery profit will include a charge for the
closure of the existing factories in Wales.  Westmill profit will be ahead of
last year.



In February we agreed to acquire, subject to clearance by the regulatory
authorities, KR Castlemaine, a manufacturer and marketer of meat products in
Australia.  The addition of the KR brand and the modern, low-cost factory at
Castlemaine will strengthen our existing meat business.



Ingredients

Ingredients will achieve good sales growth but some higher input costs,
specifically in our protein business, will adversely impact margin.  Growth in
enzymes has been achieved by a combination of increased sales resource with a
wider geographical reach and the introduction of new products.   In yeast, the
Brazilian business benefited from lower operating and molasses costs and the
expansion of the Argentinean plant has created one of the lowest cost plants in
the world.  Increased demand has led to further investment in additional yeast
and yeast extract capacity in north east China and enzyme capacity in Finland.
We sold our small UK-based emulsifier business at the beginning of February with
completion subject to competition clearance.



Retail

Sales and profit at Primark were substantially ahead of last year reflecting the
increase in retail selling space and a 4% increase in like-for-like sales.
Christmas trading was ahead of our expectations.  At the half year we will be
operating from 173 stores and 5 million sq ft of selling space.  Since last year
end new stores were opened in Jerez and Madrid, bringing the number of stores in
Spain to four, in Cork and larger stores in Tralee and Brighton which replaced
smaller stores there.  We expect to open a further eight stores in the second
half including four stores in Spain.









For further enquiries please contact:

Associated British Foods

John Bason, Finance Director                            Tel:   [phone]

Citigate Dewe Rogerson

Jonathan Clare, Chris Barrie, Hannah Seward             Tel:   [phone]


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