The CMA’s independent inquiry group found that Allied Bakeries would exit the market entirely in Northern Ireland and Great Britain if the merger did not go ahead.

In its final report published on 16^th June, the CMA stated that competitive pressure from Allied Bakeries would be lost with or without the merger and so found that the merger does not raise competition concerns.

Since the start of the investigation, the inquiry group heard that bread suppliers across the UK are facing longstanding challenges, such as declining demand as well as significant increases in costs.

Evidence gathered shows that Allied Bakeries and Hovis have each faced financial challenges, with Allied Bakeries making significant losses over the last 14 years, despite exploring a range of options to improve performance, due to the overall decline in bread demand, the increase in demand for lower-margin private-label products and significant rises in costs, such as energy, wheat and distribution.

Chair of the independent inquiry group leading the investigation, Cyrus Mehta said with bread being a basic staple for millions of people, it was important to look carefully at the deal and assess competition implications for households in the UK.

“On the basis of the wide range of evidence we received, which showed the difficult position many UK-based bakeries are in, we found Allied Bakeries – owned by ABF – would likely leave the market entirely if the deal did not proceed,” said Cyrus Mehta.

“Taking that into account, we have concluded the deal does not raise competition concerns.”

The post CMA gives green light to ABF and Hovis merger first appeared on Neighbourhood Retailer.

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

The post Allied Bakeries would close if bread business merger doesn’t go ahead: CMA first appeared on Neighbourhood Retailer.

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.

The post Lidl Northern Ireland and Hovis celebrate partnership first appeared on Neighbourhood Retailer.

The first step of the CMA’s information-gathering process – an invitation to comment time period – concluded in early October, with one of the next stages being the launch its formal investigation into the transaction.

Having confirmed earlier this year they were in discussions regarding a potential transaction, it was announced during the summer that Hovis Group would be bought over by ABF.

As stated in their Interim Results Announcement back in April, Allied Bakeries faced what it called a “very challenging market”.

“We are evaluating strategic options for Allied Bakeries against this backdrop and we remain committed to increasing long-term shareholder value,” said a statement.

Subject to regulatory review by the CMA, the proposed acquisition has been hailed as a “significant step towards creating a more sustainable and efficient bakery operation in the UK”.

In a statement, ABF said the acquisition would combine the production and distribution activities of the two businesses, driving significant costs synergies and efficiencies, to create a profitable UK bread business that is sustainable over the long-term.

The post CMA probe continues into bread business ‘merger’ first appeared on Neighbourhood Retailer.

The move follows months of negotiations after it had been confirmed that ABF, owner of Allied Bakeries, were in discussions with Hovis owners, Endless LLP.

Subject to regulatory review by the Competition and Markets Authority (CMA), the proposed acquisition has been hailed as a “significant step towards creating a more sustainable and efficient bakery operation in the UK”.

It had previously been stated in the interim results that ABF had been “evaluating a range of strategic options for Allied Bakeries”. Profitability at Allied Bakeries has been increasingly challenged in recent years by a decline in demand for pre-sliced, packaged bread and a loss of scale in Allied Bakeries’ nationwide distribution network serving the major retailers with daily delivery of bread and bakery goods.

In a statement, ABF said the acquisition will combine the production and distribution activities of the two businesses, driving significant costs synergies and efficiencies, to create a profitable UK bread business that is sustainable over the long-term.

“The combined business will be better placed to compete effectively and to establish a stable platform for product innovation in the segments of the UK bakery category that are growing as a result of changing consumer tastes and needs,” said the statement.

“This will include improvement in existing products and expansion into new product ranges.”

George Weston, Chief Executive of ABF said: “Supporting the Hovis and Kingsmill brands with well-invested and efficient operations will also enable innovation and growth. This solution will create value for shareholders, provide greater choice for consumers and increase efficiencies for customers.”

Aidan Robson, Managing Partner of Endless LLP added: “We are proud of the journey we’ve shared with Hovis to date, supporting this historic brand in a highly competitive and challenging market.

“The transaction with ABF represents an opportunity to create a platform for long-term sustainability in the bakery sector for the benefit of retailers and consumers.

“While we work towards achieving CMA clearance of the transaction, our focus remains on Hovis to continue delivering exceptional products and services to its customers.”

It is anticipated that the CMA approval may take some time, and until regulatory clearance is granted, Hovis Group Ltd and Allied Bakeries will continue to operate as separate entities.

The post Hovis owner agrees sale to ABF to create ’profitable UK bread business’ first appeared on Neighbourhood Retailer.