P&H Update #1: No deliveries today, Imperial profits hit, Co-op to supply Costcutter

Customers of Palmer & Harvey, the delivered wholesaler which entered administration yesterday (November 28) have been informed that there will be no deliveries made today and rival wholesalers are gearing up to step in.

Rival wholesalers have said they are ready to help any of P&H’s 90,000 customers in need of supply.

“We are ready to help any P&H’s customers either small independents or national retail chains,” Booker CEO Charles Wilson told trade magazine The Grocer.

Bestway MD Martin Race said the wholesaler was “open for business” and “able to support any retailers who needed help”.

Earlier today, Costcutter, one of P&H’s biggest customers, confirmed it had agreed an exclusive supply deal with the Co-op (due to start in Spring 2018), but would also, like Bestway, Booker and others, try to help other P&H customers in the short term.

“With P&H no longer able to supply our stores, we have activated our contingency plans that will see our retailers supported by the Co-op and other suppliers in the run up to our deal with the Co-op,” said Costcutter CEO Darcy Willson-Rymer.

The deal, which is set to commence around the same time that the Co-op hopes to complete its £137m takeover of wholesale and retail  group Nisa, will see Co-op become the exclusive wholesale supplier to CSG (Costcutter Stores Group) which operates some 2,200 Costcutter, Mace, Simply Fresh, Supershop and Kwiksave convenience stores.

The deal will also provide the opportunity for Costcutter’s independent retailers to become Co-op franchisees.

Co-op Food chief executive Jo Whitfield said: “Whilst our deal with Costcutter will start formally in Spring 2018 we are looking at practical ways we can support independent retailers during this busy trading period, in light of the news concerning P&H. It is essential that we maintain a strong independent retail sector and the Co-op is committed to playing its part, along with others in the industry, in ensuring this occurs.”

Finally, tobacco giant Imperial Brands, one of P&H’s biggest suppliers and creditors, today admitted that P&H’s decision to enter administration could impact its operating profit in the current financial year by up to £160 million.

Imperial Brands said it was “disappointed to learn that despite Imperial’s on-going support, the directors of P&H have today appointed administrators.”

“P&H has been a long-standing trading partner in the UK and for several months Imperial has been working to find a solution that provides the business, and its employees, with a sustainable long-term future. Imperial was prepared to explore further alternatives but other parties have been unwilling to pursue these to a successful conclusion,” the company said in a statement. “We currently estimate that P&H’s decision to enter administration may have a one-off impact on group operating profit in our current financial year of up to £160 million, the majority of which would relate to excise duty which is non-recoverable.

Imperial Brands said it ‘does not anticipate any significant disruption to its UK operations, stating it has well-prepared contingency plans which will ensure that the on-going supply to Imperial’s retail customers remains unaffected’.

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