‘Banks behind Superquinn deal should repay suppliers for goods’

THE banks behind the Superquinn sale to the Musgrave Group should repay suppliers for goods delivered on credit from the moment the receivers were engaged, says IFA president John Bryan.

Industry sources suggest that Bank of Ireland, AIB and Northern Irish Bank engaged receivers four months ago to review Superquinn’s financial situation. The receivers confirmed to the IFA that they have been engaged for “a significant amount of time” by the banks.

The receivers said that €50m was owed to Superquinn’s suppliers. Of this, €22m had been insured against credit risk. The receivers said they are not responsible for the other €28m, a decision which industry bodies claim will hit smaller suppliers worst.

John Bryan said: “The banks allowed Superquinn to continue to accept supplies on credit while negotiating a rescue package, and then used an arm of the law to maximise the benefits of the deal for themselves.

“The banks should come clean on this issue. At a minimum, suppliers would have to be paid from the date the banks came together to initiate this process.”

Mr Bryan demanded that farmers and fresh produce suppliers who have traded in good faith with Superquinn should not be hung out to dry.

Mr Bryan said: “It is obvious that genuine suppliers, many of them small operators whose businesses are in grave danger of going under, have been sacrificed to achieve a deal that allowed the sale of Superquinn.

“The three banks who colluded have serious questions to answer about how a deal was hatched to sell the business over recent months, while knowing that suppliers were in the firing line.”

Macra na Feirme national president Alan Jagoe said the handling of the Superquinn crisis showed that Ireland’s poorly legislated food supply chain model has given the retailer total dominance and power.

Mr Jagoe said that suppliers should be paid in full, and called on the Government to fast-track legislation to provide safeguards for suppliers and farmers and to create a food chain that delivers a fair margin to all.

ICMSA president Jackie Cahill said that multinational retail companies enjoy higher profit margins in Ireland than in any other market. He also criticised successive Irish governments for attempting to address this issue with a voluntary code.

Mr Cahill said: “What is required is a statutory code, backed up by Irish and EU legislation that will protect the interests of farmer and consumer alike. Against that background, the Musgrave takeover is a mere sideshow.

“While it would not be in anyone’s interest for Superquinn to have literally closed shop, ICMSA does have issues over the huge losses that could be inflicted on suppliers to the former Superquinn Group.”

The receivers said that suppliers retain title and can, therefore, take back any goods they own which are currently on Superquinn’s shelves. However, several groups have pointed out that they have little to gain from taking back goods which have been packaged in Superquinn branding.