Consolidation and rationalisation in the bakery manufacturing industry is particularly hitting smaller enterprises, a new Key Note report indicates.

The Market Report 2006 on Bread and Bakery Products shows that, in 2004, there were 125 VAT-registered manufacturers of bakery products with a turnover of up to £49,000 in the UK. In 2005, that number had dropped to 115.

There was also a drop in the number of companies with a turnover of between £50,000 and £99,000 – from 305 in 2003 to 285 in 2004 and 250 in 2005, as smaller firms were absorbed by larger players.

Overall the number of VAT-registered enterprises manufacturing bread and other bakery products, such as pastry products and cakes, was 1,580 during 2004 and 1,540 in 2005.

Nearly two-thirds (63.7%) have fewer than 10 employees.