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The community was named after Tobermory, the largest settlement in the Isle of Mull in Scotland. The name is derived from Saint Barróg's monastery on nearby island of Iona and means "Mary's well". Tobermory was first settled by Europeans in 1846 when John McLean (1814–1901) moved his family from Collingwood to a site near present-day downtown Tobermory. He built a sawmill there which attracted other settlers to the area who were mostly interested in fishing and logging. In 1881, he sold his mill for $1,000 to James Walker (1845–1916), whose brother William had founded Walkers' Limited three years earlier with their father Alexander Sr., also an immigrant from Scotland; this company would later become one of Canada's most successful chocolate makers under its brand name "Cadbury".