Hilton Food Group has announced plans to sell its Dutch-based vegetarian business, Dalco Food. The buyer identified in the agreement is Livekindly Production. The acquisition is set to take place for a total of £5.4m. The transaction remains subject to standard approvals and deliverables before it can be finalized.
This move represents a clear shift in corporate strategy for the major food supplier. The company intends to redirect and focus investment to drive growth from its core meat and fresh prepared segments. These areas have historically provided the most stability for the group. Hilton is also working on directing its efforts to improve performance and maximise value within its seafood, vegan and vegetarian businesses, though Dalco is no longer part of that long-term vision.
Financial Performance and Classification
The Dutch-based vegetarian business has faced significant financial headwinds recently. Dalco reported an adjusted operating loss of approximately £2m in the first half of 2026. As a result of this pending sale, the loss will be posted as a loss from discounted operations in the company’s books.
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Accountants will treat Dalco as an asset held for sale within the company’s 2026 interim results. This classification separates the unit’s financial activity from the ongoing operations of the main business. The interim results are scheduled to be reported on 3 September 2026. This accounting step ensures that the struggling unit does not skew the performance metrics of the remaining core operations.
For a large supplier, separating a loss-making unit from the main financial reports provides a cleaner view of the underlying health of the company. It allows management to concentrate resources on the areas that actually drive revenue rather than propping up a division that has struggled to find its footing in a competitive market. This type of portfolio adjustment is often necessary to maintain shareholder confidence when one part of the business consistently underperforms against the rest of the group.
Core Growth vs. Declining Sales
Earlier this year, the company posted solid full-year results for 2025. The core businesses were responsible for boosting the overall performance during that period. In contrast, Dalco continued to see sales decline and faced various operational challenges throughout the year.
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Despite the weak performance from the Dutch business, Hilton Food Group reported a revenue increase of 11.9 per cent on a constant currency basis. This statistic highlights the strength of the company’s primary sectors. The growth occurred even as the vegetarian unit dragged on the total figures. The divergence between the success of the meat business and the struggles of Dalco likely accelerated the decision to divest.
Mark Allen OBE, the executive chair of Hilton Foods, spoke about the company’s direction in a previous statement. He said the group is “executing improvement plans in Seachill, Foppen and Dalco.” He described these businesses as having “limited cooperation with the Group’s core capabilities.” The stated goal of these plans was to increase “strategic optionality.”
Allen further emphasized the strength of the primary operations. “Our core retail meat offering is a resilient business,” he stated. He noted that the strength of customer relationships and consistent delivery has underpinned the company’s performance. This resilience has persisted despite continued raw material inflation affecting the broader industry.
