IN THE supermarket aisles of Europe, Reckitt & Benckiser finds itself head to head with perhaps the world’s most aggressive producer and marketer of consumer goods — Procter & Gamble.

The two companies are doing battle over dishwasher tablets and it has got pretty rough between Finish (Reckitt’s champion) and Fairy (P&G’s challenger). Selling prices have been savaged in places.

For P&G, this is just a minor spat in a tiny product category. For Reckitt, it is more important. Dishwasher detergent accounts for a large chunk of profits. Finish, the market leader, will probably see off Fairy. P&G, which has a much smaller market share in Europe, has retreated twice before in earlier assaults. It can probably find easier targets for promotional pushes.

Nevertheless, the fight illustrates the problems that Reckitt faces as it grows bigger. Dishwashing products, which it has trumpeted in the past as one of its key growth areas, reported flat net revenues in the first half.

Fortunately, the rest of the business fared better. Reckitt’s formula of constant product innovation backed up with blanket advertising has paid off again. Whether it’s a new way of dispensing air freshener or removing unwanted hair, the company keeps launching new products, pushing up sales at twice the industry average while at the same time widening margins. Reckitt is secretive about future products, but sounds confident of a plentiful pipeline over the next three years.

It has also proved itself capable of integrating acquisitions smoothly and effectively. It paid top whack for the branded products arm of Boots last year, but the deal looks like paying off quickly through synergies and working capital savings.

The shares have had a great run over the past five years, rising to a well-deserved premium over rival European firms and narrowing the gap with American competitors.

Yet there is a lot of expectation built into that rating now. The shares, after yesterday’s 20p dip to £20.56, trade on 20.5 times earnings and yield 2.1 per cent.

For all its success, earnings-per-share growth has been slowing for some time, from 26.5 per cent in 2002 to 19.1 per cent in 2003, 16.8 per cent in 2004, 14.4 per cent in 2005 and a forecast 12.2 per cent this year. That begins to look like a trend. Time to bank a bit of profit.

Barratt

IT’S a bit strange that David Pretty, the outgoing chief executive of Barratt Developments, should start talking about acquisitions just as he’s about to leave. For 14 years Barratt has carved out an enviable reputation for organic growth only. Dull it may have been, compared to acquisitive rivals such as Persimmon, but it has worked.

Barratt is on track to deliver its fourteenth successive year of profits growth in 2006. Moreover, next year’s results are already starting to look respectable. A bumper £845 million of forward orders is already in the bag — not far behind the record £880 million that Barratt achieved two years ago.

It is not as if Barratt has been afraid of spending money. It has preferred simply to buy land rather than companies. Last year it purchased £850 million-worth and it now has 66,500 plots — a reassuring 4½ years’ worth, based on current volumes. There are no constraints to organic growth in the immediate future.

Should Barratt now set out on the mergers and acquisitions front? Deals certainly can boost returns, as Persimmmon has shown, and there is no shortage of possible candidates, both smaller listed rivals, such as Wilson Bowden, Bovis or Redrow, and privately owned companies, such as Miller and Gladedale.

Nevertheless, the timing is a bit disconcerting. Mr Pretty is about to hand over to this autumn to Mark Clare, the head of British Gas’s residential energy division. Mr Clare, who was passed over for the top job at Centrica, has no experience of housebuilding.

He will inherit a strong team and a business in rude health, but it might be wise to give him a decent spell at the helm before embarking on any acquisitions. Even small deals can throw up challenges to the most experienced. Luckily, Mr Pretty will be around for a short handover period.

Even so, the risks probably have increased. That, however, seems already reflected in the share price, which at 947½p, up 15p yesterday, is only 8.4 times expected 2006 earnings, a discount to the overall sector. The yield is 3 per cent. Hold.

GSDO

MANY investors find it awkward or tax-inefficient or plain illegal to invest in open-ended hedge fund vehicles, hence the sudden rush of closed-end vehicles raising money and listing in London. Goldman Sachs is the latest sponsor to go down this route, announcing that it has raised $507 million for a new company, Goldman Sachs Dynamic Opportunities. Dealings in three denominations of shares, including a sterling class, begin on Thursday.

GSDO will invest the proceeds in 15-20 individual hedge funds with a broad spread of investment styles. As ever the trick will be to find genuinely skilful hedge funds still open for new business. Goldman, the manager, is giving itself leeway by reserving the right to place money in hedge funds with little or no track record.

With individual hedge funds taking 1-3 per cent of the assets each year in fees, plus 15-30 per cent of the profits they make, and Goldman taking 1.5 per cent of what’s left plus 10 per cent of any remaining profits, shareholders will have to hope it is extremely prescient in picking winners.

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