Foodservice giant Brakes has taken on at least £100m worth of business from the administrators of its collapsed rival DBC.
Under the deal, Brakes will pick up the supply to most of DBC’s large customers. The contracts are worth approximately £100m-£120m per year and accounted for 30-40% of DBC’s volumes.
“The feedback I’m getting is that it’s close to a seamless transition,” said Baker Tilly joint administrator Russell Cash. “Service levels have been maintained and will improve.”
Brakes COO Ian Goldsmith said teams had been working on contingency plans in the background for several months. “Baker Tilly approached us, and since that point we’ve worked for a number of days with them to finesse those contingency plans so we can help as many customers as we can with minimum disruption,” he said.
Brakes will serve the contracts from its existing network.
The £70m-a-year contract to supply the Ministry of Defence has been bought by Vestey Foods Group, which was already one of three MoD suppliers in the Purple Foodservice consortium. The deal will see Vestey assume operations at DBC’s Petersfield and Dundonald sites, and saves 245 jobs.
Nearly 300 staff have been made redundant from a range of depots so far. The remaining 450 are still employed by DBC while discussions continue.
Administrators from Baker Tilly are in discussions about the remaining nine depots, of which DBC holds the freehold to four.
About 40% of DBC’s business, typically from smaller customers, remains up for grabs.
DBC entered administration on Tuesday following a failed attempt to sell the entire business as a going concern. The company recorded a £4.95m loss in the year to March 2011 and is understood to have been on course for a similar loss this year.
DBC was bought by Iceland bosses Malcolm Walker, Andrew Pritchard and Tarsem Dhaliwal in 2009. At the time, Dhaliwal, who resigned as DBC’s chairman this month, said he would look to use Iceland’s £2bn buying power to improve DBC’s pricing and range.