Kerry Group is understood to be in discussions with Burns Philips on an acquisition of the Australian group's bakery and seasonings business, which has sales of around £80 million.

A spokesman for Kerry declined to comment on the discussions, but industry sources indicated Kerry is the front-runner for the BurnsPhilips business at a price tag of around £25 million. NCB analyst Mr John Conway said yesterday he believes an announcement by Kerry on an Australian acquisition is "imminent".

The NCB analyst noted that acquisition opportunities in the food ingredients industry, particularly in Australia/Asia and South America, are not common, indicating that despite the proximity to the Dalgety deal, Kerry cannot afford to let the Burns Philips opportunity pass.

Kerry's chief executive, Mr Denis Brosnan, said last month that the group is interested in Burns Philips but warned that the spread of the Burns Philips business all over Australia and New Zealand could put pressure on Kerry's management resources. But at a NCB conference last week, Mr Brosnan restated the group's objective to grow its food ingredients operations in Australia/Asia and South America to the level of its existing North American and European operations.