The competition has six recipe categories including Cake, Biscuit, Pastry or Dessert; Snack or Confectionery; Cereal, Bread or Cracker.
Competition entries will be judged on quality and best use of ingredients, and the winner will be announced in July.
Any small speciality food and drink producer with an annual turnover of less than £10 million can enter the competition, which closes on 15 March 2007.
An online entry form is available at [http://www.macadamias.org.uk] or by calling 020 7580 1770.
Island Bakery Organics is building a 650sq m bakery near its current Tobermory site on the Isle of Mull.
The family-owned bakery, renowned for its organic biscuits, plans to increase output to meet growing demand for its existing range and to introduce new lines.
Owner Joe Reade said: "We have been a cottage industry since launching five years ago, operating from tiny premises attached to my brother's house. We are now bursting at the seams."
The new bakery is five times the size of its current bakery and will be made with "environmentally sensitive" materials.
The company also plans to sell its bakery shop in Tobermory when it moves.