Mergers and acquisitions in the UK food and drink sector are set to pick up in 2010 after a collapse in deals in 2009, according to sector analyst Grant Thornton.

Last year, there were just 70 deals across the industry, down 30% on 2008 and well below the 132 deals reported in 2007.

“And over half of those related to acquisitions from insolvent companies or businesses in distress, observes Phil Jackson, head of food sector at Grant Thornton. However, he goes on to say that food and drink companies’ share prices have rallied as a result of a rise in profits linked to cost-cutting efforts in 2009.

“The recovery in profitability is bringing buyers back and encouraging potential sellers to test the market, he adds.