Trade credit insurance has been thrust into the spotlight after another high-profile firm collapsed.
In the last 24hrs, Palmer & Harvey, the food and tobacco wholesaler, has gone into administration after takeover talks with private equity firm Carlyle collapsed. The largest tobacco supplier in the UK is also the fifth-biggest privately owned firm here supplying around 90,000 outlets. According to PwC, speaking to the BBC, the group had been “hit by challenging trading conditions in recent months and efforts to restructure the business have been unsuccessful.”
“This has resulted in cash flow pressures and it has not been possible to secure additional funding to support the business,” it said.
Such a high-profile collapse has caught the attention of the British Insurance Brokers’ Association (BIBA) which has noted that the credit insurance market is likely to pay big claims to unpaid suppliers on the back of the administration. With the company having sales of more than £4 billion and this being the busiest time of the year, it has highlighted the importance of the cover and now the industry body is urging more awareness.
“Without suitable insurance in place many other companies would also have been adversely affected by this collapse,” said Mike Hallam, BIBA head of technical services. “This serves to show the value of Trade Credit insurance which is available from many insurance brokers.”
The collapse of P&H comes on the back of a string of mergers across the retail industry with Tesco taking over food wholesaler Booker in a £3.7 billion deal, and Co-Op taking over rival Nisa.
Related stories:
Nexus names non-executive deputy chairman for trade credit MGAs
Nexus Group acquires specialist trade credit broker
