Palmer & Harvey has entered into a new agreement to supply tobacco to Conviviality Retail, which will in turn supply P&H with slower moving alcohol lines.
Under the initial two-year agreement, Conviviality will supply P&H’s national distribution centre with beers, wines & spirits, while P&H will supply tobacco centrally to Conviviality, which it will sell through its Bargain Booze estate.
P&H managing director, wholesale Martyn Ward told The Grocer the two parties had been talking for some time to find ways to leverage the areas in which they were strong, tobacco in the case of P&H and alcohol for Conviviality.
“We started the conversation with Conviviality earlier this year about how we could enhance our customer offer and we worked out we were very similar companies, just with strengths in different areas,” he said.
“We are delighted with this strategic collaboration with Conviviality Retail. We are confident it will benefit our respective businesses, partners and customers, and believe there is scope for growth in future years.”
He explained that P&H would continue to work directly with alcohol suppliers for fast moving lines, but the advantage of this deal was that it didn’t have to tie up up warehousing space and cash in slower moving lines that are often subject to minimum order quantities (MOQs).
Conviviality Retail MD David Robinson added: “I am excited to have signed this supply agreement with P&H. We are constantly looking at ways to ensure we provide the right range, service, support and pricing for our franchisees. This agreement will help us to maintain and further improve our ability to invest in future initiatives and pricing to provide our franchisees with more opportunities to strengthen their business. We look forward to working with the P&H team on this exciting initiative for both our businesses.”