Suppliers count cost of collapse

An Off Licence News poll of suppliers has revealed increased nervousness about trading with other multiple specialists in the wake of First Quench’s collapse.

The survey also casts doubt over multiple specialists’ ability to survive, as an overwhelming 55% of suppliers admit they are unsure about providing stock to a new owner due to a lack of credit, compared to 41% who said they definitely would.

In a worrying sign of the impact First Quench’s demise could have across the sector, 79% of suppliers said it has made them nervous about dealing with other multiple specialists. However, despite the concerns, 53% still believed there was a long-term future for the sector.

Suppliers have reported varying degrees of exposure to the business with debts ranging from £50,000 and under to up to £1 million – though there are widespread fears that some may be owed much more.

Suppliers are still waiting to hear whether the debt is recoverable, but 40% of those owed money said they had no confidence in being paid, while 45% said they didn’t know what would happen.

Although none of the suppliers questioned said their business would close if they failed to recover what’s owed, 35% said it would lead to cash-flow problems, and the same number said they will be forced to revise their growth forecasts.

One agent said: “I represent several producers and it’s irksome to think that First Quench must have known what was happening when it ordered the wine. One was asked to produce 40,000 bottles specifically packaged in wooden cases because it wanted to stack them on the floor of stores. Although the wine hasn’t been delivered or paid for, it’s e200,000-worth of stock it’s got to find a home for.

“Others are owed money. But what’s left for the people who supplied them? It’s unfair to think it’s actually still selling wine that we’ll never be paid for.”