Musgrave overtakes Tesco after Irish buy
Wednesday 20 July 2011
The company behind Londis and Budgens is to buy the troubled Irish grocer Superquinn out of receivership for an undisclosed sum, catapulting it above Tesco to become the biggest player in the Irish market. The purchase by Musgrave Group, which operates the SuperValu, Centra and Daybreak chains in Ireland, will secure the long-term future of Superquinn and 2,800 jobs at 24-store chain.
Superquinn had buckled under crippling debts of about €400m and a syndicate of banks – including AIB, Bank of Ireland and National Irish Bank – called in KPMG as receivers on Monday.
Chris Martin, the chief execute of Musgrave, said: "Purchasing Superquinn, when approved, supports our growth agenda and will sustain our competitiveness."
KPMG said it would contact anxious suppliers to Superquinn, who claim to be owed €100m, over the coming days. The accountancy firm said: "The joint receivers will ensure payment for future deliveries for the duration of the receivership and wish to continue trading with all of Superquinn's existing suppliers." Food and Drink Industry Ireland (FDII), the trade body, said it was "seeking immediate clarification" from the receiver over payments owed to suppliers.
Paul Kelly, FDII Director, said: "Failure to pay these companies what they are rightly due will have a disastrous effect on the supply chain and affect the immediate viability of many food companies, placing thousands of jobs at risk."
Musgrave has 3,300 stores and Superquinn would give it an extra 6.1 per cent of the grocery market, making it the largest player in the Republic of Ireland with 27.8 per cent, according to Kantar Worldpanel. Tesco has 27.6 per cent .
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