Tobacco giant Imperial Brands has said it is in talks to save wholesaler Palmer and Harvey, which supplies Tesco and thousands of retail outlets.P&H is the UK’s biggest cigarette supplier, and Imperial said it was working “to seek to create a sustainable future” for the company.As well as cigarettes, P&H supplies 12,000 products, including chilled foods and alcohol. It serves major chains, convenience stores and petrol station forecourts. Reports have been circulating for some weeks that P&H was struggling with debts, and owed substantial sums to its own major suppliers. 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.” P&H delivers to 90,000 stores around the UK. Rival distributors include Bestway, which serves 100,000 businesses, and Booker, which owns Budgens, Londis and Premier convenience stores and delivers to 94,000 outlets.Competition threatBooker is in takeover talks with Tesco, a move which would threaten P&H’s relationship with the supermarket giant, which is one of its most important clients, with more than 6,000 stores. The competition authority, the CMA, is assessing whether the proposed grocery tie-up could reduce choice for shoppers and for small stores supplied by Booker.The CMA said that if the deal were to go through, potentially, Booker could offer inferior wholesale terms to the stores it currently supplies, “in order to drive customers to their local Tesco”.P&H is the UK’s fifth biggest privately owned company. It is owned by its employees, both current and former, and has been in business since 1925.
Source: BBC News