Palmer and Harvey McLane Ltd has gone into administration, with reports confirming that it has ceased operations with immediate effect, and will make no further deliveries. 

Matthew Callaghan, Ian Green and Zelf Hussein of PwC were appointed joint administrators on 28 November 2017. The administration covers eight of the nine P&H companies, but does not affect WS Retail Ltd which continues to trade as normal.

P&H was recognised as the UK’s number one delivered wholesaler, with an annual turnover of more than £4 billion. It served the convenience, forecourt and CTN retail sector, and was one of the largest privately owned companies in the country with approximately 3,400 employees - 2,500 of those working at head office and the branch network have been made redundant. The remaining employees will assist the joint administrators in managing the activities of the business as it winds down. Currently 450 employees have been retained within the wholesale business. 

P&H has around 90,000 customers ranging from small local corner stores to large supermarkets, including thousands of forecourts. It operated a delivery network of 14 regional distribution centres which supplies up to 12,000 product lines. 

It had hit hard times and recently confirmed it had entered a period of exclusivity with The Carlyle Group, as it sought to secure the future of the 90-year-old business.

The company had worked with PricewaterhouseCoopers LLP, acting as its financial adviser, to explore all of its strategic options, but the administration announcement came as a shock to the industry. The administrators are continuing to explore options for a sale of P&H Direct Van Sales Limited, P&H Sweetdirect Limited and P&H Snacksdirect Limited, all subsidiaries of Palmer & Harvey McLane (Holdings) Ltd. 

Matthew Callaghan, joint administrator and PwC partner, said: "The Palmer & Harvey name has been a trusted partner for retailers and suppliers for nearly 100 years. This is a devastating blow for everyone who has been involved in the business. The administration team will focus on working with employees, clients and suppliers to facilitate a smooth and effective wind-down or transfer of operations over the next few weeks.

“The P&H Group has faced a challenging trading environment, and the need for significant restructuring has been recognised for some while. The company has insufficient cash resources to continue to trade beyond the short term and the directors have concluded that there is no longer any reasonable prospect of a sale. Therefore, the directors have had no choice but to appoint administrators.

“The administrators are working closely with employees affected by the closure of the business to ensure they receive the support they need during this difficult time to assist with their claims for redundancy and other compensatory payments. Our priority is to ensure that all employees made redundant are assisted in processing their claims with immediate effect. We will be circulating correspondence to all staff as soon as possible which will outline the support available to complete redundancy payment forms.”

A spokesman for tobacco supplier JTI said: “JTI can confirm it was informed today that Palmer & Harvey had unfortunately entered administration. Throughout the whole process JTI has worked continuously to facilitate a constructive solution to the P&H Group’s challenges including extending significant financial and operational support to allow P&H to continue its operations. Regrettably our considerable efforts were not successful. We have a contingency plan in place and we do not expect any significant interruption in the supply of our products”.

Mark Jones, food and drink lawyer at Gordons law firm, said: “The administration of P&H seemed inevitable. It’s been struggling to make money for a while, it lost £17m in the year to April 2016 and over £8m the year before that. 

“The business had a heavy reliance on tobacco and tobacco companies. Its largest customer, Tesco, which accounted for 40 per cent of its revenue, just bought P&H’s biggest rival. Notwithstanding the troubles P&H faced, I do expect there to be plenty of bidders for the business. 

“You’ve seen Tesco, Sainsbury’s, the Co-Op and Morrisons make moves to grab market share in the last year or so. You can therefore expect one of the large retailers to be interested in this wholesaler, and my money is on Sainsbury’s.”