Grain-wave: Hovis and Kingsmill-owners ‘in talks’ about historic bread merger

3 May 2025, 15:10

Associated British Foods (ABF) and Hovis are negotiating a merger, which could help with a decades-long decline in bread sales

ABF, which owns Kingsmill parent company Allied Bakeries, has been involved in discussions that could see a merger between rival bread brands Hovis and Kingsmill.

The idea comes as a result of continued hits to supermarket bread sales.

Food inflation and grain prices affected by the war in Ukraine have contributed to a year on year decrease in bread sales.

The bread market still remains a significant share of the UK food industry however, comprising £5bn of the food market with 11m loaves sold each day.

A potential merger would give the two rivals a larger share of the bread market, which is currently dominated by Warburton’s: the UK’s largest bakery.

In theory, Hovis’ 24% share of the market combined with Kingsmill’s 17% could outsize Warburton’s 34% share of the market.

But a larger market share wouldn’t guarantee higher turnover than Warburton’s, who have a wider variety of products in their brand.

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The merger could also put the Competition and Markets Authority watchdog under more pressure, when they’re already under scrutiny from the government.

There has been no final conclusion or certain comment on the outcome of these talks however - but the likely outcome has been cited as an absorption of Hovis into ABF.

ABF is said to also be considering other options for Allied Bakery’s future, some of which don’t include the 135 year old Hovis brand.