Britain’s competition regulator has announced an in-depth investigation into Associated British Foods’ (ABF) acquisition of Hovis, following initial scrutiny of the deal. The Competition and Markets Authority (CMA) confirmed that it would fast-track its probe into the purchase, signaling heightened regulatory attention on the consolidation of the UK bread market.

Details of the Acquisition

ABF, the parent company of Primark and major UK bread brands including Kingsmill, Allinson’s, and Sunblest, agreed last August to acquire the 135-year-old Hovis brand from private equity firm Endless. The terms of the deal were not publicly disclosed.

Hovis holds around 18% of the UK’s pre-sliced packaged bread market, while ABF’s existing bread operations under Allied Bakeries account for roughly 6%, leaving market leader Warburtons with a 28% share. By adding Hovis to its portfolio, ABF would significantly strengthen its position in the packaged bread sector, a market facing declining demand for pre-sliced loaves.

An ABF spokesperson said:

“Our priority is to achieve regulatory clearance as efficiently as possible, and we are pleased to have agreed with the CMA to fast-track the in-depth and detailed final phase of their merger review. We will continue to work constructively with the CMA to demonstrate the benefits of the transaction.”

A Hovis spokesperson added that the company will continue cooperating with the CMA to secure clearance for the deal as soon as possible.

Why the CMA Is Investigating

The CMA has expressed concern that the acquisition could reduce competition in the UK bread market, potentially leading to higher prices or reduced choice for consumers. The UK regulator is particularly vigilant when a major company acquires a strong competitor, as in this case, where ABF would control multiple significant bread brands.

Industry analysts note that consolidation in the UK packaged bread sector is increasing, with major players like Warburtons, Kingsmill, and now Hovis dominating market share. The CMA’s fast-tracking of the investigation reflects both the strategic importance of Hovis and the wider implications for competition in the bakery industry.

The UK Bread Market Context

The acquisition comes amid a challenging period for UK bakers, with falling demand for pre-sliced loaves and growing consumer interest in artisan and fresh bread. Consolidation allows larger firms like ABF to leverage economies of scale, streamline production, and maintain profitability.

Adding Hovis would also complement ABF’s Allied Bakeries portfolio, enabling cross-brand marketing, distribution efficiencies, and stronger bargaining power with retailers. However, regulators are keen to ensure that these commercial benefits do not come at the expense of fair competition.

Next Steps

The CMA’s in-depth review will involve a detailed assessment of the UK bread market, including potential impacts on pricing, consumer choice, and competitors. ABF and Hovis will continue providing data and evidence to support the transaction, with a final decision expected later this year.

This investigation highlights the CMA’s commitment to maintaining competitive balance in the food sector, particularly in essential goods like bread, which remains a staple in UK households.