Fledgling supermarket chain Haldanes has threatened legal proceedings against The Co-operative Group, alleging that the society “materially breached key terms of the agreements” when it acquired former Somerfield stores.

In a strongly-worded statement, Haldanes chairman Arthur Harris claimed The Co-op, which sold Haldanes 26 stores in 2009-10, had “sold me, customers in 26 local markets and quite possibly 600 of their former employees down the river in order to do its deal with Somerfields, while cynically weakening the competition their own stores face in these localities”.

Harris claimed in the statement that he had “consistently” asked the society for meetings since September 2010 “to discuss the issues and seek a resolution but [had] been consistently ignored or refused by The Co-op’s senior management”.

He added: “We believe that The Co-op would much prefer to see Haldanes go bust than address the issues arising as, we calculate, this could represent as much as £10m bottom-line annual profit for The Co-op. The Co-op has a real interest in driving Haldanes out of business.

“Over the last four months I, through another of my companies, have had to invest £2m into Haldanes to ensure the business could continue and staff be paid. Six hundred jobs are at stake here, all ex-Co-op employees, and The Co-op appears to have no regard for these people whatsoever.”

Responding to Haldanes' statement, The Co-op said: "Haldanes has indicated in a press release today that it has issued proceedings against The Co-operative Group. However, no proceedings have been served on the group at the time of releasing this statement. Should they be served, we intend to contest them vigorously.

"The Co-operative Group has acted in good faith throughout its dealings with Haldanes and categorically refutes all allegations of impropriety.

"The original transaction was subject to full due diligence on the part of Haldanes and its advisers. The Co-operative Group has complied with all our competition undertakings and, at the same time, has been pleased to support the Haldanes business financially through its start-up phase."

Haldanes opened its first store in December 2009 and quickly amassed a portfolio of 26 stores. However, it was forced to close one outlet, in Dunbar, in June and also failed to open planned another store in Pwllheli, north Wales. It has since acquired 20 former Netto stores from Asda and is converting them into a new discount chain called Ugo.

Two Haldanes stores have since converted to Ugo – including one store near Stoke on Trent, which Harris said had been put in “great danger” by the opening of a Sainsbury’s store in the same town.

Last month the company also acquired Woodhead Bakery and 11 of its retail outlets to supply bakery products to its estate.

Read more
Netto switch is no sweat for Haldanes (7 May 2011)
Haldanes’ new bakery to supply retail estate (30 April 2011)
Haldanes’ discount venture doubles up (19 March 2011)

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