Palmer & Harvey customers could face delivery fees if the wholesaler collapses, according to industry expert David Gilroy.
Imperial Tobacco and Japan Tobacco International (JTI) have appointed EY and Deloitte to help advise on options to clear P&H’s £50m debt, in was revealed last week. The delivered wholesaler has until the end of September to generate the funds.
Mr Gilroy told RN: “P&H is teetering on the edge and it rarely ends well when suppliers are investing.
"It’s delivering to 90,000 units every week and there will be a vacuum if it stops. Who will take this up? Where will the supply come from?
“If it does go down it will be seismic and will have a profound effect.”
Mr Gilroy raised concerns over retailers being left without a supplier or being asked to pay for deliveries.
“There are lots of hidden costs in delivering to retailers,” he said. “Delivering to retailers for free at cash and carry prices is not tenable. It’s the elephant in the room.
“At some point retailers will have to accept they will be charged for the service. Whether it’s delivery costs or a different pricing structure. I think we are only months away from this.”
Vicky Singh, of Londis in Mitcham, said the impact on business would be huge. “It is very worrying because we get more than 50% of our goods from P&H,” he said.
“We won’t be able to afford goods from another wholesaler if they’re more expensive, so we’ll probably purchase entirely from Londis.”
Ushi Vithani, of the Front Page in Thamesmead, expressed similar worries. He said: “Retailers are being left in the lurch. Unless there’s a miracle, retailers will pay through the nose for deliveries. Independents will suffer.”
Jayesh Parekh, of Jay’s Costcutter in Fallowfield, Manchester, added: “Nobody has any confidence at all anymore.
“I don’t think there’s guarantee of what will happen to P&H, but either situation is frightening and many retailers are moving to different wholesalers.”
A P&H spokeswoman said: “Having received a number of expressions of interest from trade and financial parties, we are confident of a successful outcome.”