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Rescued Superquinn 'must pay suppliers'

A trade body has said that recently-rescued supermarket chain Superquinn must pay its debts in full to avoid smaller companies in the supply chain from going under.

The supermarket group was placed under the control of receivers on Monday and is understood to have debts totalling around €400m (£351m).

Now the Northern Ireland Food and Drink Association (NIFDA) has called on MLAs to get involved in making sure bills are paid now that it has been acquired by Cork-based Musgrave, which operates 3,300 stores in Ireland, Britain and Spain, including the Supervalu chain in Northern Ireland.

The purchase will make Musgrave the largest grocery seller in the Republic, ahead of Tesco and Dunnes Stores for the first time, and will lift the firm's share of the Irish grocery market to as much as 29%.

Superquinn will remain under the management of the receivers pending regulatory approval and the completion of the transaction.

Kieran Wallace and Eamonn Richardson, of accountancy firm KPMG, were appointed joint receivers and managers to the Superquinn Group earlier this week by Bank of Ireland, Allied Irish Banks and National Irish Bank.

Superquinn, founded by Feargal Quinn, an Irish senator, positioned itself at the higher end of the market. The Quinn family sold it to Select Retail Holdings Ltd, or SRH, a group of high-profile Irish property developers, for a reported €450m (£395m) at the height of the property boom in 2005.

Northern Ireland Food and Drink Association executive director Michael Bell said that the "unprecedented" failure of Superquinn may force many smaller suppliers to go to the wall and cost thousands of jobs in the supply chain.

"I have worked with the food and drink industry for 27 years and a failure of this scale is unprecedented in my experience," he said.

"Small, medium and large food and drink manufacturers and suppliers right across Northern Ireland and the Republic of Ireland are owed up to €100m from Superquinn.

"Failure to pay NIFDA companies will have a disastrous effect on the supply chain and affect the immediate viability of many food and drink companies, potentially placing thousands of jobs at risk."