Nisa moves to support Costcutter and McColl’s

Scunthorpe, Lincolnshire, UK: Nisa has agreed a short-term contract to supply Costcutter stores affected by the collapse of wholesaler Palmer and Harvey.

Under the deal, Costcutter stores will be supplied by Nisa until a deal with the Co-op is finalised in the new year.

Interim chief executive Arnu Misra said: “Combined with our agreement to provide a short-term supply contract to McColl’s, this arrangement will increase our buying power for the benefit of all of our members. We look forward to working with Costcutter over the peak trading period, and providing our traditionally high levels of service to them, as well as to the rest of our membership.”

According to an article in the Guardian, Palmer and Harvey directors, former directors and other shareholders extracted about £70m in cash from the grocery wholesaler over the past nine years despite ongoing losses.

Palmer and Harvey was bought by its management team in 2008 in a deal that valued the company at £345m. The deal was largely funded by debt.

Palmer and Harvey, the wholesaler’s parent company, has paid out more than £8m a year in dividends since 2009 to its shareholders despite making losses of about £10m a year or more in all but one year, 2014.