The CMA has been investigating the proposed merger of the two bread businesses and whether it would substantially reduce competition in the supply of bread and baked goods in Northern Ireland and Great Britain.

In the interim report, the CMA states its provisional conclusion is that absent the merger, Associated British Foods (ABF) is likely to exit the Allied Bakeries business in the whole of the UK, however added there is likely to be a purchaser for Allied Bakeries assets in Northern Ireland that would continue to compete with Hovis absent the merger.

It found that the merger between the companies would not substantially reduce competition in Great Britain as competition between the two would be lost with or without the merger. However, they have provisionally found competition concerns in Northern Ireland.

Subsequently, ABF is presently running a sales process for its bakery business here in Northern Ireland, where it remains profitable, unlike the GB business.

The CMA’s interim report found that evidence shows that Allied Bakeries is a heavily loss-making business in a structurally declining market and the bakery business is not of wider strategic importance to Associated British Foods; while Allied Bakeries’ Kingsmill brand is considered to be weak compared to other brands, such as Hovis and Warburtons, and this has contributed to the significant decline in branded volumes.

“As one of only three GB suppliers with a nationwide delivery network that delivers bread and other bakery products direct to retail stores six days per week, Allied Bakeries faces high fixed costs from distribution, which has impacted profitability as Allied Bakeries’ volumes have declined,” states the CMA.

PROVISIONAL CONCLUSION

It added that the overall pool of potential purchases for the Allied Bakeries business as a whole is “likely to be limited as Allied Bakeries is loss making” with any potential purchaser requiring significant funding to absorb losses.

The CMA also notes that with the company’s Northern Ireland business largely independent of the GB business, it is profitable and considers that there are relevant differences between GB and NI that impact whether it is likely that there would be an alternative buyer for the NI business.

“The Allied Bakeries NI business represents an opportunity for other suppliers, such as those based in the Republic of Ireland, to enter or expand in NI to help overcome barriers to entry and expansion in NI, including access to distribution and the importance of the brand,” states the CMA.

“Evidence indicates that the markets for bread and other bakery products in NI are separate from those in GB,” it adds, stating that there are different consumer preferences in NI compared to GB, there are different distribution models and the competitive dynamics differ between GB and NI.

The CMA concludes provisionally that the merger between Hovis and Allied Bakeries would result in the creation of a relevant merger situation (RMS), and the creation of that RMS may be expected to result in a substantial lessening of competition (SLC) in the supply of each of bread, pancakes, potato farls and soda farls in Northern Ireland, but may not be expected to result in an SLC in the supply of bread or any other bakery products in GB.

This is not the final decision of the CMA, and it has invited any interested parties to make representations to them on these provisional findings no later than 5pm on Thursday 16^th April.

Responses can be submitted by email to ABFGrainProducts.Hovis@cma.gov.uk

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Behind this seasonal staple is a £7 million supply contract between Lidl Northern Ireland and Belfast’s own Hovis bakery, a partnership that has brought local baking to the breakfast tables of Lidl shoppers in Northern Ireland for more than 25 years.

Having supplied the retailer since it opened its very first store in 1999, Hovis is a cornerstone of Lidl Northern Ireland’s local supply chain. This Easter, the Hovis team at Apollo Road in South Belfast is producing two types of the seasonal classic hot cross buns which will be available in all 44 stores across the region: the premium Deluxe Hot Cross Buns [£1.39], crafted with real butter and 30% fruit content, and the family favourite private label Connell Bakery Hot Cross Buns [£0.99].

Kevin Duffy, Chief Commercial Officer at Lidl Ireland and Northern Ireland said: “Hot cross buns are a seasonal staple in many households across Northern Ireland and we are proud to meet that demand through our long-standing relationship with Belfast’s own Hovis.

“This £7 million contract reflects our ongoing commitment to prioritising local sourcing and our significant spend within the local agri-food industry. Having worked with Hovis since our first store opened in 1999, we value the heritage and quality they bring to our shelves, ensuring our customers can enjoy the very best homemade produce at market-leading value.”

COMMITMENT TO LOCAL SUPPLIERS

Trevor McCrum, General Manager at Hovis Ireland added: “As a Belfast-based bakery with over 150 years of history, we take great pride in seeing our hot cross buns at the center of Easter celebrations across the country.

“Our longstanding relationship with Lidl Northern Ireland provides a key platform for our business, delivering scale while staying true to our local roots. We are delighted to continue delivering high-quality, Belfast-baked favorites to Lidl shoppers for another busy Easter season.”

Lidl Northern Ireland’s commitment to investing in local suppliers is demonstrated in its latest Supplier and Business Partner Impact Report, released in November 2025, which revealed that the retailer procured a record £557 million in goods and services from local suppliers and business partners in Northern Ireland in the last financial year alone, with £413 million worth of NI goods exported to Lidl stores across the globe.

Alongside established partners like Hovis, Lidl also champions emerging local producers through its Kickstart Supplier Development Programme. Now in its ninth year, Kickstart has seen Lidl invest more than £4 million into showcasing innovative homegrown products, acting as a springboard for numerous local success stories including Holmes Bakery, Hellbent, and Slumber Jack Coffee.

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Live from April to July 2026, the campaign will feature on OOH advertising, digital and social media as well as on the street sampling of over 500K consumers. It will attract its core audience of 18 to 34-year-olds, reaching over 20 million consumers.

Lisa McKenna, Boost Brand Director at AG Barr said they have always championed value, bringing great tasting functionality at a great price.

“Boost is not about high octane activities, we represent those who need energy for their everyday needs – the Mondays, not Mountains. So, like our name, we are straight up and embrace our simplicity so that we can deliver the best quality and best value for shoppers – truly a no-brainer choice,” said Lisa.

Boost continues to go from strength to strength and the new campaign builds on the brand’s momentum. Boost is the No.3 brand in Energy drinks^[1] and Boost Red Berry is the No. 2 top selling Energy drink¹ in Northern Ireland. Boost Sports Drinks are the No. 3 brand¹ in sports drinks and they have recently launched a new range of three great tasting, zero sugar waters with electrolytes.

“We’re aiming to build on this with our clear messaging, delivering straight up energy for straight up sales opportunities,” added Lisa.

Retailers should prominently display Boost Energy and Sport in their energy fixtures and Boost Water+ in their water fixtures to offer great-tasting, great value choices to their shoppers and drive incremental sales.

^[1] Circana, Value Sales, MAT to 07/03/26, Northern Ireland

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Limited edition flavours have proven to be a powerful driver of growth for the brand and the wider category, and this launch follows strong consumer demand after the original Ice Cream flavour debuted as a limited edition in 2023 and delivered £29m to the soft drinks category^[1].

Available nationally now, IRN-BRU Ice Cream joins the brand’s core IRN-BRU ZERO range, formerly known as IRN-BRU XTRA. The new permanent flavour extension is set to strengthen the core zero sugar range, while bringing additional excitement to the fixture. Consumer insight has underlined the potential of the flavour, with two in three IRN-BRU shoppers saying they would buy IRN-BRU Ice Cream^[2].

Kenny Nicholson, IRN-BRU Brand Director at AG Barr said: “Everyone knows IRN-BRU is truly unique. There’s no other flavour on the market quite like it. We’re ‘Made in Scotland from Girders’ but with a sweet, soft side, and every piece of innovation we bring to market should embody that spirit.

“We’ve already shown through our limited editions that IRN-BRU is far more than a single flavour product, and now we’re taking the next step by bringing some of that innovation into the core range.

“Inspired by the classic ice-cream float, IRN-BRU Ice Cream taps into the trend for nostalgic comfort while delivering an irresistible twist on the brand’s iconic taste. We all know the ritual – a cold can of IRN-BRU and a scoop of vanilla. It’s a classic for a reason,” Kenny added.

“With IRN-BRU Ice Cream we’ve bottled that magic in a ready-to-go format that captures that nostalgic comfort but still delivers the unmistakable IRN-BRU flavour. It’s been tried, tested and loved by shoppers, so now it’s here to stay.”

To support the launch, AG Barr will roll out a bold marketing campaign rooted in the brand’s “Made in Scotland from Girders” comms platform.

Retailers should prominently display IRN-BRU Ice-Cream in their chiller next to core IRN-BRU ZERO and use our eye-catching POS suite to drive incremental sales.

^[1] IRI Marketplace, Value Sales, 12 wks to 52 w/e 26.8.23 vs YA, Total Marketplace

^[2] Vypr consumer research Apr 2025

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In its Q4 trading updated released earlier this month, the company revealed it had outperformed a tough market, with total sales up 6.8% to £2,151 million, with company-managed shop like-for-like sales up 2.4%.

While market conditions remain challenging, Greggs continues to outperform with year-on-year gains in market share.

The food-to-go operator opened 207 new shops in 2025, averaging four openings every week, with 50 relocations and 36 closures, resulting in 121 net new shop openings. The company had 2739 shops trading as at 27^th December 2025.

Chief Executive, Roisin Currie said that 2025 was a challenging year with subdued consumer confidence impacting the food to go market, however the company made good progress throughout the year.

“Against this backdrop, I’m pleased that Greggs outperformed the wider market and increased its market share of visits,” she said.

“We enter 2026 with a strong pipeline of new opportunities to make Greggs even more convenient for customers. This is underpinned by the investments we have been making in our supply chain capacity, which start to become operational this year.

“Our ongoing focus on efficiency allows us to deliver exception value to customers who are managing their budgets carefully.”

Fourth quarter total sales were 7.4% higher than in 2024, with like-for-like sales in company-managed shops growing by 2.9%. Subdued consumer confidence continued to impact the food to go market, as did weather extremes earlier in the year. Against this backdrop, Greggs increased its market share of visits, including at breakfast and in the evening (Circana, 12 months to September 2025).

Operational costs were well controlled and input costs were in line with the company’s expectations. Their ongoing focus on structural cost reduction delivered a further £13 million in efficiencies in 2025, as they continued to drive additional value across its integrated supply chain and business processes.

Its estate expansion programme is developing their reach into new locations in under-penetrated catchments as well as relocating constrained existing shops to better locations, facilitating further growth in traditional trading areas. They also opened the first three of their smaller-format Bitesize Greggs shops, enabling them to reach customers in high-footfall, prime locations that are constrained by space.

Looking to 2026, they expect a similar rate and profile of estate growth in what they call “carefully chosen locations”.

“We expect the level of like-for-like cost inflation to be lower than in 2025 and are confident that we can continue to mitigate this whilst retaining our value leadership,” added Roisin Currie.

“We expect consumer confidence to remain a market headwind in the year ahead which, along with the costs of introducing our new supply chain capacity, will put some temporary pressure on margins, as previously disclosed. However, our competitive position remains strong and we continue to take market share in a challenging food to go market. Our store opening programme will continue to drive further strong sales growth.”

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