The Kingsmill owner has said that it has agreed to buy rivals Hovis and plans companies to merge in a step that will build the UK’s largest bread brand.
Associated British Foods (ABF), who owns primer, rivita and twinings, said it will currently cut the cost to make two harmful businesses profitable.
The Unite Union represents workers in Hovis and Kingsmill and warns that it will “not tolerate attacks on jobs, salary or conditions”.
Warborts are the current market leaders in the UK’s Bradmacking and the deal will need the approval from the competition watchdog to move forward.
The sales of Kingsmill and Hovis rotis are considered as a flat due to the decline in demand for basic east-packed bread, as special breads such as sour and siabatta took a large piece of market.
Sandwich and toast are also away from the menu for some British consumers who are cut back on carbohydrates in favor of a high-protein diet.
ABF on Friday told investors that it had reached an agreement to buy a historic brand Hovis from private equity owner Endless.
It said that the joint business will “be better to compete effectively” and to create new products “as a result of changing consumer tastes and needs”.
The business of ABF’s allid bakers, which makes Kingsmill and Elinson’s bread, first confirmed the conversation on a possible deal three months ago.
Hovis, which was established in 1890, was purchased from Premier Foods in 2020 by Andles, the owner of the Sri Kipling brand.
ABF stated that the deal would lead to “significant cost coordination and capacity” in an attempt to create a constant profitable bread business.
ABF Chief Executive Officer George Weston said: “This solution will create value for shareholders, provide more and more options for consumers and increase efficiency for customers.”
But Unite General Secretary Sharon Graham said: “Whereas there is still a long way to go before any purchase, Hovis and Kingsmill must ensure that jobs are protected.”
He said that Unite would work to ensure the two brands to ensure that it fully involves the Sangh in any decision affecting its members.
The deal requires approval from the competition and the market authority.
