Bakkavor, the UK-based fresh food supplier, has signalled that rising commodity prices and wage increases are set to add roughly £65 million to costs this year, above earlier projections of £50 million. The additional expenditure stems largely from dairy price inflation, a higher wage bill, and increases in national insurance and the minimum wage. The company is working to offset these pressures through customer pricing and internal cost controls.
The group reported a 32% drop in first-half earnings, with interim pre-tax profit at £24.6 million, down from £41.8 million a year earlier. Stripping out transaction and exceptional costs, underlying profits rose to £48.6 million. Transaction-related costs included £11 million linked to the planned takeover by Greencore.
Greencore, a supermarket sandwich and prepared foods supplier, agreed in May to acquire Bakkavor for £1.2 billion, valuing the deal at £2 per share. The reverse takeover would create a combined entity employing around 30,500 staff with annual sales near £4 billion. Shareholders approved the deal in July.
The Competition and Markets Authority is reviewing the merger, with an initial decision expected by 27 October. The transaction, if cleared, is expected to complete in early 2026. Greencore shareholders will hold 56% of the combined company, leaving Bakkavor with a 44% stake.
Bakkavor operates 40 sites globally, including 20 in the UK, producing over 3,100 prepared food items. Greencore has 16 UK factories and 17 distribution centres, producing nearly 750 million food-to-go items annually.