OFT to be left out of pocket by Threshers
THE Office of Fair Trading is set to be one of the biggest casualties from the demise of high street off-licence firm First Quench Retailer, as it is owed millions of pounds.
First Quench Retailing, the parent company behind Threshers and Wine Rack off-licences, was one of six firms fined £173.3.m by the OFT last July, after admitting to collusion over the pricing of cigarettes.
The collusion emerged after Sainsbury’s blew the whistle – a decision that has allowed it to escape prosecution and a fine.
The OFT found that two tobacco firms – Imperial Tobacco and Gallaher – passed to retailers information about what their rivals would be charging for leading cigarette brands to increase their profit margins. A number of parties continue to fight the allegations.
But despite over a year passing since awarding the fine, the OFT is still to receive a singly penny of the fine from First Quench – leaving it as another unsecured creditor out of pocket.
First Quench Retailing, which collapsed into administration two weeks ago, runs about 1,200 stores in Scotland, England and Wales and employs 6,300 people.
The retailer failed to cope with cut-price competition from supermarkets and falling trade caused by the recession, KPMG said.
KPMG has announced plans to shut 373 stores, leading to more than 1,738 redundancies.
Administrators hope to sell the business as a “going concern” thereby preserving as many jobs as possible.
KPMG’s UK head of restructuring at and joint administrator, Richard Fleming, said 247 of the stores will continue to trade until 25 November and 126 until 2 December.
He added the administrators are confident of securing a sale for the remaining stores “in the coming weeks” and that he had already received expressions of interest.