The UK competition regulator has intensified scrutiny of a £75 million acquisition in which Associated British Foods plans to acquire Hovis from private equity firm Endless. This deal would merge the country’s second and third-largest bread manufacturers, with ABF already owning the Kingsmill brand alongside its Primark clothing operations.
The Competition and Markets Authority has now launched a comprehensive second-phase examination to determine whether this combination could damage consumer interests. The CMA aims to establish if the merger would substantially reduce competition in mass-produced baked goods, potentially limiting choices and pushing prices higher in supermarkets.
Regulators must evaluate whether existing competitors pose adequate pressure on pricing and quality. Warburtons dominates the packaged sliced bread market with over 25 percent of sales, while supermarket own-label products and artisanal alternatives also factor into the competitive landscape. The investigation will run until at least June’s end, examining these dynamics thoroughly.
The takeover announcement arrived during a period of declining demand for mass-produced sliced bread, as consumers increasingly favor less processed and artisanal options. Industry directors previously indicated the deal would likely not conclude before September 2026, with reviews continuing beyond that timeframe as regulatory processes proceed.
Concurrently, ABF released a profit warning, revealing that adjusted operating profit across the entire group would fall below previous year levels. Weak consumer confidence across the UK and Europe undermined sales performance, particularly affecting Primark operations. Despite gaining market share, the clothing division expects only low single-digit sales growth during the first half of the year ahead.
