THE company caught up in the controversy surrounding food contaminated with potentially cancer-causing dye Sudan 1 said yesterday it did not expect to lose money as a result of the scare.

Premier Foods, which used chilli powder containing the dye to make Worcester sauce, said it did not believe it had any material financial exposure to potential claims against it.

The group, which used the Worcester sauce to make three other products and supplied it to some of its customers, said a number had said they intended to claim for the costs related to the recall of products containing the dye.

They could claim for alleged damage to their own products, the costs of recalling and destroying recovered products and claims for consequential loss, Premier said.

In its full-year results statement, the company said it had not been possible to fully quantify potential claims due to the limited number that had been made so far and uncertainty surrounding the situation.

However, it said it had made a preliminary assessment based on its managers' view of the circumstances and legal advice.

"At this time, based on this assessment, its own insurance position and its potential claims against its suppliers and their own insurers, Premier does not believe it has any material financial exposure," the company said.

"We will continue to review the situation on a daily basis and should the situation change materially, we will update the markets accordingly."

Premier, which makes household brands including Crosse and Blackwell Branston Pickle, Typhoo Tea and Ambrosia, made pre-tax profits of £8.7m in the year to December 31, compared with losses of £300,000 the year before.

The company, whose production of Branston Pickle and other products was temporarily halted by a fire at its Suffolk factory in October, said the profits came despite the blaze and challenging market conditions causing slower sales at Christmas.

The acquisition of Kraft Foods UK's ambient desserts business, including Bird's Custard and Angel Delight, was completed last month and will further strengthen its portfolio.