Palmer & Harvey and Costcutter have announced the details of their new joint venture and distribution agreement, as revealed by The Grocer last week.

The two companies said they had formed a joint venture buying company called The Buyco, which will be 50/50 owned and have a buying power of £5bn to “negotiate the best deals through maximum volume”.

P&H will also hand over the direct management of its symbol fascias Mace, SuperShop and Your Store to Costcutter from 7 April to focus on wholesale distribution.

It has also signed a new eight-year wholesale distribution contract with Costcutter, ending Costcutter’s more than 20-year relationship with Nisa.

“Through the creation of The Buyco we will have unrivalled purchasing power within the UK convenience sector” - Darcy Willson-Rymer

A new three-tier own-label range will also be launched, with an “extensive” fresh and chilled offer.

“We have been single-mindedly focused on creating maximum value for our members and it became wholly apparent that without access to the proportionate benefits of our own buying power this could not happen,” said CEO Darcy Willson-Rymer.

“Through the creation of The Buyco we will have unrivalled purchasing power within the UK convenience sector, meaning that we can purchase the best prices, promotions and range for our members.”

P&H CEO Chris Etherington added: “By divesting our retail operation to Costcutter, we can now focus all our energies on extending the delivery benefits already enjoyed by Mace, SuperShop and Your Store retailers to the wider Costcutter Supermarkets Group.”