Costcutter has agreed a new tie-up with wholesale giant Palmer & Harvey, signalling its intention to quit Nisa.

The Grocer understands that the new deal will see Costcutter, which is owned by Bibby Line Group, taking over the management of the P&H symbol group Mace, while P&H will handle the distribution for both Costcutter and Mace.

Costcutter is currently supplied through Nisa, but its contract with the Scunthorpe-based buying group is set to expire in July 2014.

Negotiations had been ongoing regarding extending this contract but for many industry experts Costcutter’s departure from the buying group was on the cards ever since Nisa opted to award a major distribution contract to DHL in April 2011 rather than Bibby which had previously handled its ambient distribution.

Bibby had also previously tried to buy Nisa around the time it took its initial 51% stake in Costcutter. It took the remaining 49% in November 2011.

Costcutter’s sales force are believed to have been informed of the move already while P&H employees and customers are due to be briefed next week.

For more details on this story see this weekend’s issue of The Grocer.

Topics