Pasta fashion cooks up £1.1bn bid

SCARCELY a decade ago, spaghetti Bolognese was an exotic foreign dish that graced the average English dinner table about twice a month as a way of using up the leftovers from the Sunday roast.

But today, pasta, in myriad varieties of fresh, dry and frozen, is a staple in the diet of 300m Europeans. Our desire for ever-more exotic versions and accompaniments is sending shock waves through the food industry. What was once an Italian family business seems to be becoming a family business once more.

Nothing shows this better than Monday's e1.8bn (£1.1bn) bid by Barilla, the Parma-based pasta maker, for German industrial bakery group Kamps. Barilla began life as a corner bakery opened by one Pietro Barilla in 1877. In 1910, his sons abandoned baking for pasta-making and pioneered the sale of dried, packaged pasta throughout Italy. This was parallelled by other family concerns. Mama Guilia Buitoni had set up shop in 1827 and was soon rivalled by Rani and Panzani, while Lustucru in Marseilles began turning out pasta with a French twist.

In recent decades, many of these were gobbled up by global food giants: Barilla was bought by WR Grace of the US, Buitoni by Switzerland's Nestle, Rana by Unilever Bestfoods and Panzani by French biscuits group Danone.

But in recent years, as consumers searched for more authentic products and accompaniments, smaller companies proved more responsive to demand. In 1979, another Pietro Barilla, heir of the founder, succeeded in buying back Barilla from Grace, and Panzani was subsequently unhooked from Danone by venture capital group Paribas Affaires Industrielles. Both have thrived and Barilla is now the world's leading pasta-maker, producing one of every three packets eaten in Italy, one in four in Europe and one in 10 in the US.

Guido Barilla, whose Italian rock star looks belie the business flair with which he chairs the Barilla board, now heads a group with annual sales of e2.4bn, earnings before tax, amortisation and depreciation of e325m and just e130m of debt. He has launched Germany's biggest hostile bid since Vodafone got Mannesmann. His target, Kamps, is the country's biggest industrial baker, with sales of e1.7bn a year.

Meanwhile, Panzani, with 35% of the French market, has been stalking Lustucru's fresh pasta arm. Fuelled by pasta profits, both have developed an appetite for acquisitions and Europewide expansion that traditional food giants are struggling to resist.