Sodexho's UK appetite sharpens

FRENCH contract caterer Sodexho Alliance is planning to put the knife into ailing British rival Compass Group by bidding more vigorously for UK school meal contracts.

The Government's decision to spend an additional £280m on ingredients for school meals following a campaign for better food by chef Jamie Oliver has rekindled Sodexho's appetite for the market, a spokeswoman said.

'We very much welcome this decision, which should create more opportunities for us,' a Sodexho spokeswoman said. 'Until now, we have declined to bid for contracts where spending on ingredients was less than 50p a child, because we do not believe you can provide balanced meals for that.'

The additional Government money, which is intended to ensure spending on ingredients of at least 50p per primary school child and 60p per secondary scholar, should ensure Sodexho could contemplate bidding for every school contract put out to tender, she said.

{1}Sodexho, based in Paris, already feeds 104,000 UK schoolchildren in 700 schools, blending British staples such as fish pie with Asian imports including sweet and sour chicken to provide nutritionally-balanced meals. Compass provides the food at 2000 British schools.

But Sodexho's outperformance on the stock market is marked. The group's shares are up 13% this year, and first-half sales rose 4% to €5.89bn (£3.13bn), aided by new contracts to feed soldiers and prisoners in Britain.

Compass shares have fallen 31% over the past 12 months following two profit warnings.