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Bermuda Bakery Limited To Close Bakery Division

Hamilton, Bermuda: 7th May 2004 - Continued declining sales, escalating costs, and unsustainable losses in the Bakery Division in recent years have contributed to a Bermuda Bakery Ltd announcement today that effective June 4, 2004, it will close its Bakery Division, Bermuda Bakery (Operations) Ltd.

"After a careful review of our options regarding the distribution of bread and rolls, and the baking of snacks and pastries, it has been determined that the Company can no longer sustain the continuing losses being incurred by the Bakery Division," says Board Vice-Chairman, Mr. David White. "As part of the decision to close, we have completed negotiations with a company to be known as Bermuda Breads Ltd. for the purchase of some of the Bakery Division assets."

"Closing the Bakery Division marks the end of an era and a proud tradition for the Company overall," says Acting General Manager, Mr. Eric Vauhkonen. "Regretfully this closure will result in the redundancy of 22 Bakery Division employees. However, the Company will do all it can to help those affected. Severance packages in accordance with the provisions of the Collective Agreement, the Employment Act and Company Policy will be provided."

Closure of the Bakery Division, though difficult, comes as no surprise as employees have been kept informed of the Division's financial challenges.

As the Bermuda Bakery enters into the phase of winding up the Bakery Division, it wishes to assure its customers a smooth transition as a new distributor; Bermuda Breads Ltd., commences their operations. The Company's main suppliers of imported breads are assisting through this transition period and, together with Bermuda Breads Ltd, will work to ensure an ample supply of quality bread and baked goods products such as ButterCrust, Sunbeam, Nature's Own and Roman Meal are available.

"We are proud of our employees and their contribution to the Company over its 80 year tradition of providing bread and baked goods to the Island," says Board Vice-Chairman, Mr. David White. "We would like to thank them for their dedication and we would like to thank our many loyal customers and suppliers for their patronage and support."

-end-

For further information, contact:

Bermuda Bakery (Operations) Ltd

Mr. James A. Pearman

Chairman of the Board

Mr. David White

Vice-Chairman

Mr. Eric Vauhkonen

Acting General Manager

Tel: (441) 295-5985 Office

ericv@bermudabakery.bm

Bermuda Breads Ltd

Mr. Kim White

Cox Hallet Wilkinson

Tel: (441) 295-4630