UPDATE 2-Cranswick upbeat on outlook as consumers switch to pork

* Says Q1 sales on continuing basis rose to 167 mln stg

* Says consumers choose pork over beef, lamb

* Shares up almost 5 pct (Adds chairman's comments; updates share movement)

By Tresa Sherin Morera

BANGALORE, July 13 (Reuters) - British pork supplier Cranswick Plc (CWK.L) made a positive start to the current financial year and continues to grow its business with higher sales as consumers choose pork over beef and lamb, Chairman Martin Davey said.

"It (pork) is favourable compared to beef and lamb for two principle reasons, first of which is pricing -- pork is substantially cheaper than beef or lamb," Davey told Reuters.

"Secondly, from a health perspective, pork is perceived to be a healthier alternative to beef and lamb and in many cases ... as alternative white meat or the alternative to poultry." Shares in Cranswick -- which supplies fresh pork and gourmet sausages to the UK's food retail and manufacturing sectors -- rose to a high of 632 pence, before shedding some gains to trade up more than a percent at 611 pence by 1151 GMT on the London Stock Exchange.

The company said its first-quarter sales on a continuing basis rose 11 percent from last year and that it remained confident of its prospects for the future, aided by higher demand for its products.

Sales for the three months ended June 30, excluding revenue from the pet business sold in April, rose to 167 million pounds ($269.4 million).

"We've had a very strong demand for a lot of our products for barbecuing in the early summer weeks and most barbecues in the UK are based around pork," Chairman Davey said.

KBC Peel Hunt said Cranswick's gourmet sausages have also been supported by new business wins and the 'Jamie Oliver effect' -- a surging interest in good quality food spurred by celebrity chef Oliver.

The brokerage has a "buy" rating on the company' stock.

However, the company said it saw a rise in raw material prices during the quarter but added that this was being handled by improving labour efficiencies, by further investment in equipment and discussions with customers.

"Since January 2008, we've seen an increase of 40 percent in our underlying raw material costs... and we've had to discuss with customers how some of that could be incorporated in to price increases," Davey said.

Cranswick invested more than 20 million pounds in the business last year, and expects to do the same this year. ($1=.6200 Pound) (Additional reporting by Kumar Alagappan in Bangalore; Editing by Gopakumar Warrier, Himani Sarkar)