The agreement includes the supply of Kingsmill, Allinson and Burgen bread across Co-operatives 4,000 stores

The agreement includes the supply of Kingsmill, Allinson and Burgen bread across Co-operative's 4,000 stores

Associated British Foods has secured an own-label bread contract with UK retailer The Co-operative Group previously held by rival Premier Foods plc.

The contracted, confirmed today (25 October), will take effect from the "middle part" of 2013, ABF's Allied Bakeries said.

The Co-op said the decision to switch supplier was the result of a "full review".

Mike Osmond, commercial director for The Co-op, said: "The switch to Allied will ensure that we continue to provide our customers with the very best own-label bread, made from 100% British wheat, at a competitive price, and that we can maintain high levels of availability, quality and value across our entire bread and mornings goods range.

"Whilst we have enjoyed a good working relationship with [Premier's] British Bakeries over a number of years, the move to Allied Bakeries has been made in the best interests of our customers and members."

The retailer said suppliers such as Warburtons, and regional bakeries such as Roberts Bakery and Braces Bakery, will continue to supply the group.

Premier announced the end of its contract with an unnamed UK retailer earlier this week. It said the contract accounted for around GBP75m of annual sales but would "not affect" its 2012 performance.

ABF said the new deal is expected to create new jobs in its supply chain to enable it to service the additional stores.

"It will also further consolidate Allied Bakeries as a leading supplier in the bakery market and is testament to the strength of our brands, the quality of our products and technical expertise as well as the strength and depth of our offer," the group said.