Superquinn buyout may cost small firms €28m

HUNDREDS of small businesses are facing losses of around €28 million as Musgrave takes over control of Superquinn.

Last night, the receiver appointed to Superquinn said there would have been “chaos” if a buyer was not found immediately for the supermarket chain, which employs 2,800 people.

However, suppliers and representative groups for farmers and small business predict they could shed thousands of jobs as part of Musgrave’s purchase of the troubled Superquinn chain, which went into receivership on Monday.

Musgrave and the receivers said they are not responsible for around €28m worth of stock supplied to Superquinn, which was not insured against credit risk. Of Superquinn’s 660 suppliers, most meat, chicken, fruit and vegetables suppliers had credit-secured their stock.

However, ISME and farm groups IFA and ICMSA claim many smaller suppliers would not have taken out insurance on credit.

One supplier, Tubs Sweets, claims to have been left short €40,000.

“This is soul-destroying to a small start-up business like mine. I am one of many suppliers affected by this and I feel very cheated by Superquinn, who received my product in what I thought was good faith,” said Kevin Ginty of Tubs.

Cork-based Musgrave confirmed early yesterday morning that it was buying Superquinn at a price believed to be around €100m.

A banking syndicate of Bank of Ireland, AIB and National Irish Bank is owed €275m by Superquinn, mostly relating to property.

There is also around €150m which the group had not been in a position to meet.

Superquinn’s board said it sought buyers for the group, both international and Irish, but it was not possible to sell the business given the heavy burden of debt and obligations and it felt receivership was the best outcome.

Musgrave is not taking on Superquinn’s debts, but is purchasing between 10 and 11 of their properties, its distribution centre, head-office building and brand.