Kalev paid EEK12.39 million (€790,000).for the stake, which it acquired from Liidia Kening.
Jarle makes a range of bread and confectionery products at a plant in Johvi and sweet biscuits at another facility in Kivioli.
Kalev said the acquisition of Jarle would give it a strong position in the local biscuit market, as well as giving it its first foothold in the bread sector, in line with its strategy.
Kalev is best known as a producer of chocolate bars and sweets, which account for more than 40 per cent of total output, but also produces cocoa powder and semi-manufactured products for the Estonian market.
Its market share is around 45 per cent, and some 80 per cent of its output is sold in Estonia. Exports are mainly to Latvia and Lithuania, although its products are also sold in Scandinavia, Germany, the US and Ukraine.
Last year, Jarle posted sales of EEK49.5 million and a profit of nearly one million kroons, both lower than the previous year.
Meanwhile, Kalev has also reported an excellent Christmas performance for 2003, with more than 500 tons of Christmas-related confectionery products sold this year compared to 450 tons in 2002.
The biggest growth compared to the previous year came from the boxed chocolate segment, with sales some 50 per cent higher than in 2002, according to Kalev's marketing director, Alar Pink.
New products such as gingerbread biscuits and alcohol-free mulled wine were also well received, he said. In fact, demand for the gingerbread biscuits quickly outstripped supplies.
According to a poll carried out by TNS Emor and cited by BNS, seven out of ten Estonian residents bought a Kalev product during the Christmas or New Year period, with large chocolate bars the best-selling items.