29th November 2017.
Food Wholesaler Crashes
Palmer & Harvey, which supplies retailers including Tesco, has gone into administration after failed rescue talks.
The grocery sector is facing a grim start to the Christmas trading season after the collapse of a high successful wholesaler.
Palmer & Harvey (P&H), whose annual sales last year were more than £4 billion collapsed into administration with the loss of about 2,500 jobs.
The wholesaler has been around for last 92 years and is a key supplier to retailers such as Tesco. Any hopes of a rescue takeover disappeared when talks collapsed with Carlyle Group, the American private equity firm.
Administrators PWC, who had been advising P&H, confirmed that 2,500 of its 3,400 employees at head office and its branch network had already been made redundant, while the future for the rest looked bleak.
Palmer & Harvey was Britain’s biggest delivered wholesaler to the convenience market, supplying ambient, chilled and frozen food product lines, plus tobacco, to about 90,000 customers ranging from small local corner stores to the big supermarkets.
The wholesaler has been facing touch conditions recently however, and PWC confirmed that challenging trade conditions and cash-flow pressures, as well as a failed restructuring effort, had led to its downfall.
Matthew Callaghan, joint administrator, described the failure of Palmer & Harvey as “a devastating blow for everyone who has been involved in the business”.
The company, which claimed to be Britain’s fifth largest privately owned enterprise, supplied Costcutter and it is understood that the Co-op is poised to replace P& H as their supplier, starting next year.
The Credit Protection Association warns against assuming that if you do business with blue chip companies, this discounts any credit risk. As this recent P&H collapse shows, this is not the case. Blue chip companies are unfortunately just as capable of getting into trouble as SMEs so be just as conscientious with your paperwork and accounts processes as any other company.
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