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Suppliers to lose €25m in Superquinn takeover

THE Government was today urged to intervene in the Superquinn takeover amid claims that suppliers are likely to be out of pocket to the tune of tens of millions of euro.

The supermarket chain had more than 900 suppliers with the receivers estimating that there is €51m due to unsecured creditors, made up largely of suppliers of goods and services to Superquinn.

The receivers said they are committed to paying for the value of stock on the shelves, reckoned to be around €25m, leaving a shortfall of roughly the same level, reports said today.

ISME, the Small & Medium Enterprises Association, demanded that the Government intervene to ensure that Superquinn's small suppliers are paid for goods supplied prior to the banks putting in a receiver.

Chief executive Mark Fielding said: "It is outrageous that this type of legalised corporate robbery can take place under the noses of the administration, at a time when small and medium suppliers are struggling to survive."

He called on the Minister for Enterprise Richard Bruton to intervene, saying the State-rescued banks would get their pound of flesh from the receivers "and sell the small businesses down the road before they begin to harass them for inability to meet bank commitments".

"With our international reputation already in tatters because of banking greed, the Government must ensure that this 'high street robbery' is stopped so that some vestige of decency is salvaged, small suppliers are protected and the jobs saved," he said.

Disastrous

Food and Drink Industry Ireland (FDII), the IBEC group that represents the food industry, said it was seeking immediate clarification from the receiver as to whether trade creditors would be paid in full for goods already provided.

FDII director Paul Kelly 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 food companies, placing thousands of jobs at risk."

The receivers, Kieran Wallace and Eamonn Richardson of KPMG, who took control of the businesses on Monday night, have said they will try to fast track payments to suppliers for goods on the shelves and have also asked that creditors who are facing difficulties of their own speak directly to them.

The takeover deal is subject to regulatory approval from the Competition Authority which could take weeks to come to a decision.

Musgrave, which owns SuperValu and Centra, is buying the Superquinn stores, its distribution centres, a head office and preserving the 3,000 jobs.

While some suppliers have trade insurance to cover them for losses, others do not, leaving them nursing significant losses.

mlavery@herald.ie


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