The UK Competition and Markets Authority (CMA) has provisionally found that the proposed acquisition of Hovis Group by Associated British Foods (ABF) could weaken competition in parts of the bakery market in Northern Ireland, while posing little competitive risk in Great Britain.
The regulator published its interim findings on 26 March 2026 as part of a Phase 2 investigation into ABF’s planned purchase of Hovis through its subsidiary ABF Grain Products Limited. The CMA’s inquiry group said the deal would create a “relevant merger situation” and may lead to a substantial lessening of competition in the supply of bread and several traditional bakery products in Northern Ireland.
ABF agreed to acquire Hovis in August 2025. The group said the transaction is intended to generate efficiencies and create a sustainable and profitable UK bread business. ABF already operates a major bakery business through Allied Bakeries, which produces branded and private-label bread including Kingsmill, Allinson’s and Sunblest. Hovis, owned since 2020 by private equity firm Endless LLP, sells branded and private-label bakery goods including the Hovis, Mothers Pride and Ormo brands.
The CMA examined the impact of the deal across two main product groups: packaged sliced bread, often referred to as “plant bread,” and a range of other bakery goods. These include products such as English muffins and fruit bread in Great Britain, as well as pancakes, soda farls and potato farls in Northern Ireland.
Competition conditions differ between the two regions, according to the authority. In Great Britain, the CMA provisionally concluded that the merger would not substantially reduce competition. The regulator believes that Allied Bakeries would likely exit the market if the acquisition did not proceed, due to sustained financial losses in a declining bread sector. As a result, the competitive pressure exerted by Allied Bakeries would be lost regardless of whether the transaction goes ahead.
The CMA found that the UK bread market has faced long-term structural challenges, including falling consumer demand and rising costs for energy, wheat and distribution. Allied Bakeries has reportedly incurred high losses for more than a decade despite restructuring efforts aimed at improving its performance. Internal documents and financial data reviewed by the authority suggest that alternative strategies to restore profitability were unlikely to succeed.
The inquiry group also examined whether another buyer could acquire Allied Bakeries and maintain it as a competing supplier in Great Britain. After contacting several potential strategic purchasers, the CMA concluded that the likelihood of an alternative buyer was low, given the business’s loss-making position and limited prospects for generating synergies.
Northern Ireland presents a different competitive picture. The CMA noted that Allied Bakeries’ operations there are profitable and run largely independently from the wider UK business. The region also has distinct consumer preferences and a different competitive landscape, with fewer major suppliers and stronger brand loyalty.
Evidence gathered by the regulator suggests that the combined ABF-Hovis entity would control a big share of several markets in Northern Ireland. In bread, the two companies together account for close to two-thirds of total supply. Their combined share would also dominate private-label bread production in the region. The CMA said third-party feedback consistently identified the companies as key competitive alternatives.
The authority identified similar concerns in several traditional bakery products. In pancakes, the two businesses together represent more than 80% of sales in Northern Ireland. In soda farls and potato farls, the combined group would also hold leading positions, while rival suppliers were found to have smaller market shares and weaker distribution or brand recognition.
Based on this evidence, the CMA provisionally concluded that the merger could substantially lessen competition in Northern Ireland for bread, pancakes, soda farls and potato farls.
The interim findings are not the regulator’s final decision. Interested parties have been invited to submit comments on the provisional conclusions by 16 April 2026. At the same time, the CMA is considering potential remedies that could address the competition concerns it has identified.
The companies involved must inform the authority within three working days whether they intend to submit proposals outlining possible remedies. If they do so, the CMA will consult publicly on any measures aimed at mitigating the competition risks before reaching its final decision, which is due by late June 2026.
