Seventy workers face redundancy in Sheffield after wholesaler's collapse

P&H delivery vans
P&H delivery vans
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Up to 70 jobs could be lost in Sheffield following the collapse of a major wholesaler that is the UK's largest tobacco supplier.

Palmer and Harvey - the country's fifth biggest privately-owned firm that delivers more than 12,000 products, including food and alcohol - maintains a delivery depot in the city and a head office at Broadfield Court, Heeley.

The head office, which serves the company's subsidiaries P&H Direct, Direct Van Sales, Snacksdirect and Sweetdirect, employs around 60 people, with a further 10 working at the depot.

The firm called in administrators PwC after rescue talks with private equity firm Carlyle failed, leading to the loss of 2,500 jobs with immediate effect.

P&H had been struggling with debts and owed large sums to important suppliers. It delivers to about 90,000 outlets around the UK including supermarkets, corner shops and petrol stations.

"The group has been by hit by challenging trading conditions in recent months and efforts to restructure the business have been unsuccessful," said PwC. "This has resulted in cash flow pressures and it has not been possible to secure additional funding to support the business."

The company employed around 3,400 people, and some have been kept on to 'manage the activities of the business to an orderly closure'. The administrators were 'continuing to explore options for a sale of Direct Van Sales, Sweetdirect and Snacksdirect', meaning some of the Sheffield jobs could survive.

Staff were paid their wages for November, PwC confirmed.

A spokesman for the administrators said: "There are circa 70 staff across the two sites in Sheffield however as consultation is taking place with staff affected by the administration process I am unable to confirm how many will actually be retained or made redundant at these sites at this time. At this stage it is too early to comment on any other aspects of the administration process."

Matthew Callaghan, joint administrator and PwC partner, said the collapse was a 'devastating blow for everyone who has been involved in the business', established nearly 100 years ago.

"The administration team will focus on working with employees, clients and suppliers to facilitate a smooth and effective wind-down or transfer of operations over the next few weeks."

The Co-op has already struck a deal to supply 2,500 Costcutter shops formerly catered for by P&H.