The Canadian firm formed an Irish subsidiary just before Christmas and a spokesman for IAWS confirmed last week that the two companies plan to extend the availability of Tim Hortons products in Ireland following "encouraging" sales at test locations in the previous two years.

It is unlikely that Tim Hortons, which has over 2,600 retail outlets in Canada and almost 300 in the United States, would open a chain in Ireland due to high rental costs at prime locations. In Canada, most of its business is generated at drive-through locations.

There has been previous speculation that IAWS would begin selling Tim Hortons' products through its network of more than 20,000 convenience store customers in Ireland and the UK.

The establishment of the Tim Hortons subsidiary here in recent weeks seems to suggest that such a move might now be likely.

IAWS previously said that it could use a site in Manchester to manufacture Hortons' products, while it's possible that a new 180m facility at Grange Castle in Dublin could also fulfil such a role.

Tim Hortons was spun off by burger chain Wendy's last September in an IPO. Hortons stock soared last week as it said sales rose at outlets.

IAWS, which owns the Cuisine de France and Delice de France brands, formed a joint venture with Tim Hortons in 2002 to manufacture parbaked products for its North American chain.