Costcutter and Palmer & Harvey have both declined to comment on reports in The Grocer that they have agreed a new partnership deal.

Costcutter stores are currently supplied by Nisa, but according to the report P&H will take over the distribution contract when it expires in July next year, and Costcutter will take over management of P&H’s Mace symbol group.

Nisa and Costcutter have had negotiations over extending the distribution deal, but relations between the two have been complicated since Bibby group took over Costcutter in November 2011.

Bibby had previously tried to buy Nisa and had a bid to retain its ambient distribution contract for Nisa turned down in favour of DHL in April 2011.

According to The Grocer, Costcutter’s sales force have already been informed of the move and P&H staff and customers are due to be briefed next week.