Tobacco giant Imperial Brands confirmed this morning that it is in talks to save Palmer and Harvey.
P&H is the UK’s biggest delivered wholesaler and the biggest cigarette supplier.Imperial said it was working “to seek to create a sustainable future” for the company.
Reports have been circulating for weeks that P&H, which is owned by its current and former employees was struggling with debts, and owed substantial sums to its own major suppliers, including Imperial and JTI. Tobacco is thought to account for more than 40% of P&H’s turnover.
Imperial said: “Further to overnight media speculation, we confirm that we have been working, together with other stakeholders, to seek to create a sustainable future for the UK wholesaler, Palmer & Harvey, with whom we have a close trading relationship.”
The proposed Booker-Tesco merger could threaten P&H’s relationship with Tesco, which is its most important client; P&H’s deal to supply Tesco with tobacco runs out in 2020.
Private equity house Carlyle is also thought to be interested in P&H, which is the UK’s fifth biggest privately owned company.