At least one spurned bidder is headed to court in hopes of stopping the surprise last-minute sale of the recently closed Koffee Kup Bakery and subsidiary Vermont Bread Co.
Georgia-based Flowers Foods, the $4 billion maker of such national brands as Wonder Bread, jumped into the bakery-buying competition at the last minute and was selected as the successful bidder.
“We’re absolutely going to challenge this,” Jeff McCarroll, spokesperson for Massachusetts’ East Baking Co., said Tuesday as lawyers prepared to file paperwork. “We believe it was ramrodded through, and there’s no reason they moved so quickly other than to avoid scrutiny.”
A month after 150 Koffee Kup workers in Burlington and 100 Vermont Bread workers in Brattleboro found their plants abruptly shuttered April 26, a court-appointed receiver allowed a third company — the New Brunswick-based Mrs. Dunster’s — to announce it was the “preferred purchaser.”
“It’s our intention to get this company refocused on its core brands and core customers,” Blair Hyslop, co-CEO of Atlantic Canada’s largest family-owned bakery, said on a recent trip to New England. “It’s going to be the same people making the same recipes and distributing to the same stores.”
Mrs. Dunster’s was set to sign an agreement Monday with New York-based receiver Ronald Teplitsky. But just before the appointed hour, its CEO received an “insensitive letter” reporting the decision to instead award the Vermont bakeries to Flowers Foods, whose brands also include Sunbeam and Tastykake.
The receiver has yet to comment. But Flowers Foods issued a press release saying that even with a “strong consumer following in the region,” it has “no immediate plans to reopen” either the Burlington or Brattleboro plants.
In response, the Canadian company is considering a lawsuit.
“We are absolutely devastated for all the employees, vendors, distributors and their local communities,” Hyslop said Tuesday. “We believe we have a strong case and are exploring all of our options.”
Mrs. Dunster’s, which distributes baked goods across the Maritimes and in Maine, has an unlikely ally in the Bay State’s East Baking Co., a former competitor in the bidding process.
East Baking sprang to the forefront when it requested and received initial state authorization May 6 for up to $2.4 million in Vermont Employment Growth Incentive money to restart the plants. Mrs. Dunster’s went on to reap up to $1.8 million through the same program May 27, just hours before it announced it was the receiver’s “preferred purchaser.”
East Baking spoke with Mrs. Dunster’s about buying a Koffee Kup plant in North Grosvenor Dale, Connecticut. It questions whether a sale to Flowers Foods, which describes itself as “one of the largest producers of packaged bakery foods in the United States,” would violate the federal Clayton Act, which prohibits mergers and acquisitions that “may be substantially to lessen competition” and the Sherman Antitrust Act against monopolies.
“This is just bad all the way around,” McCarroll said. “It doesn’t benefit us being quiet. We definitely are going to do our best to unwind this sale.”
Flowers Foods has a problematic track record in Vermont. It purchased Lepage Bakeries and its Country Kitchen brand in 2012, only to close its 66-employee Brattleboro manufacturing plant in 2019.
“The bakery does not have the production volume necessary to operate efficiently and remain competitive,” a Flowers Foods spokesperson said at the time.
Gov. Phil Scott, speaking at a press conference Tuesday, expressed surprise at the current turn of events.
“It’s an iconic brand and something we’re very proud of,” Scott said. “I still have hopes they will see the merit in opening up the facilities in some capacity.”
The state reached out to Flowers Foods but has yet to receive a response.
“We’re all feeling a bit of disappointment at a thought maybe this is not going to come back in the way we thought it was, but we’re going to deploy all of our resources to try to make it absolutely the best it can possibly be,” said Lindsay Kurrle, secretary of the Agency of Commerce and Community Development. “There’s a lot we still need to learn.”