Palmer & Harvey McLane's purchase of south west-based wholesaler T&A Symonds two months ago cemented its position as the UK's biggest wholesaler. The acquisition, which increased its turnover from £3.53bn to £3.62bn, has given it control of a delivered wholesaler with 600 mostly independent retailer customers as well as a depot in Yeovil, Somerset.

The acquisition of T&A Symonds will plug shortfalls in its coverage of the south west. "T&A brings us closer to customers in the south west and we will be able to offer them a greater frequency of service," says chief executive Chris Etherington. " The major multiples are raising the bar in the c-store sector and we want to help independent retailers meet this."

However, the deal has also sent ripples across much of the wholesale sector, potentially delivering a setback to Booker's plan to conquer delivered wholesale - and throwing into doubt the future of buying group Key Lekkerland.

Having swallowed up Key wholesaler Blueheath in May, Booker had been rumoured to be eyeing a tie-up with the remaining Key Lekkerland members to give it instant national supply coverage. By snapping up Key's representative in the south west, P&H appears to have thrown a large spanner in the works.

The move has also created a totally unexpected and for many unsustainable alliance of rivals making up the membership of Key Lekkerland.

Not only do P&H and Booker operate rival symbol groups to each other, these have also traditionally competed with Key Lekkerland's KeyStore symbol group.

Both P&H and Booker have expressed their commitment to Key Lekkerland, but it is hard to see either P&H or Booker favouring KeyStore over their Mace symbol or Premier fascias respectively.

There is also the question of what the two remaining independent members of Key, JW Filshill and WH & HM Young, think about working alongside these two wholesale giants on the one hand and competing against them both in their own regions. It is too early to tell exactly how these issues will resolve themselves and opinion is predictably divided as to whether these acquisitions do mean the writing is on the wall for Key Lekkerland.

P&H declined to comment, but John Liptrot, Key Lekkerland MD, is confident that T&A Symonds and Blueheath will remain in the fold, despite the potential conflicts of interest.

He points to the fact that KeyStores have continued to open in the south west since P&H took control of T&A. "It is business as usual," he says. "P&H will retain the T&A Symonds name and it will continue its membership of Key Lekkerland. It has said it sees a role for two symbol groups and customers want the Key Lekkerland offer to continue."

JW Filshill is for the moment equally bullish. "Booker and P&H are keen to be involved," says MD Ronnie Hannah. "I don't see that changing and there are no problems so far."

Other wholesalers agree. "Key Lekkerland provides a tremendous service to the wholesale business an d I can't see why Booker and P&H would have acquired these companies just to throw away all these benefits," says one. "There may be potential conflicts of interest, but these are more likely to be between P&H and Booker ."

However, others believe the acquisitions will deliver a fatal blow to the buying group in the long term. "It is obvious this will not work," says one. "There will come a time when all three are competing for the same contract."

This could lead to one if not both leaving the group. Booker has already admitted it has been asking Blueheath's KeyStore members to convert to its Premier fascia. "Blueheath KeyStore members are visited by a Blueheath development manager as part of their ongoing support," says a Booker spokeswoman. "The option of joining Premier is discussed as well as remaining with KeyStore."

With options like this, the jury is definitely out as to how long this unlikely coalition can last. n

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