Ashers has acquired another bakery business as well as signing a supply agreement with Tesco.

The Nairn-based 10-shop chain has purchased Smillies of Elgin for an undisclosed sum. Employing 35 people, Smillies operates a bakery and two shops in Elgin, as well as an outlet in Lossiemouth. The firm also supplies wholesale.

Ashers’ joint-MD George Asher said: "It’s a good business with a good product which gives us another 20% on our sales. It will be run as a self-contained business and will continue to trade under its existing name." Smillies’ previous owners will not stay with the new set-up.

Ashers moved to a new bakery in Nairn some five years ago, since when it has acquired three shops.

Mr Asher also confirmed that his company had concluded a regional supply deal with Tesco for bread and morning goods.