Palmer & Harvey are looking to the tobacco industry for new owners according to Sky News, who have named JTI and Imperial Brands as the top contenders in any P&H takeover.

The article claims accountancy firm PwC is to oversee any potential P&H takeover, with the distributor’s ‘for sale’ status to be announced in a matter of weeks.

JTI’s head of communications Jeremy Blackburn told Retail Express, “We cannot comment on market speculation. JTI recently participated in Palmer & Harvey’s refinancing and they remain a major wholesaler of our products.”

Imperial Brands refused to comment and P&H said, "We do not comment on market speculation.”

P&H’s importance as a distribution channel for the tobacco industry led to JTI and Imperial stepping in to support the wholesaler with a multi-million pound loan. P&H was understood to be heavily indebted and struggling with decreasing margins.

Trouble for P&H could mean trouble for rivals Booker too. The Competition and Markets Authority is currently examining their merger with Tesco and will be looking specifically at the impact on the distribution market. A key customer of both Booker and P&H, Tesco signed a new distribution deal with the latter – a move that may ease the CMA’s fears.

While JTI would be new to the wholesale market, Imperial Brands already own one of the largest distribution businesses in Europe – Logista. It acquired the wholesaler through its purchase of Spanish tobacco manufacturer Altadis in 2008.