The UK's competition authority has cleared the merger of two major Northern Irish bakeries, allowing Associated British Foods (ABF) to take over Hovis in the region.

The Competition and Markets Authority (CMA) announced its approval on Thursday, noting that the combined operation would hold a dominant position in some bread categories. It would control 80% of the pancake market in Northern Ireland and 60% of the soda farl market.

ABF's Sunblest brand and Hovis, which owns the Ormo label, both have facilities in Belfast. Hovis operates on Apollo Road in the south of the city, while ABF runs its bakery on the Castlereagh Road in the east.

The CMA had identified competition concerns, but concluded that ABF's Belfast plant was heavily loss-making and would inevitably close if the merger were blocked. The regulator explored the possibility of selling the site to another operator to maintain competition, but no viable buyer was found.

Cyrus Mehta, who chaired the CMA inquiry, said bread is a staple food and the investigation carefully assessed the implications for households. He explained that evidence showed the difficult financial position of many UK bakeries, and that Allied Bakeries, the ABF subsidiary, would likely exit the market entirely without the merger. Since that loss of competition would happen regardless, the deal was not deemed to raise competition issues.

The decision allows the wider UK merger of the two bread-making businesses to proceed without conditions in Northern Ireland.