Around 2,500 jobs will be lost after major British wholesaler Palmer and Harvey (P&H) went into administration.
The firm had been holding takeover talks with private equity firm Carlyle, but these fell through today.
P&H is the UK’s fifth biggest privately-owned firm, and is the country’s main cigarette supplier.
It delivers more than 12,000 products, including alcohol and food, to around 90,000 outlets around Britain – including major chains, corner shops and petrol stations. It employs around 3,400 people.
However, it had been struggling with substantial debts that it owed to key suppliers.
Matthew Callaghan, joint administrator and partner at PwC, said: ‘This is a devastating blow for everyone who had been involved in the business.
‘The administration team will focus on working with employees, clients and suppliers to facilitate a smooth and effective wind-down or transfer of operations over the next few weeks.
‘The P&H Group has faced a challenging trading environment, and the need for significant restructuring has been recognised for some while.
‘The company has insufficient cash resources to continue to trade beyond the short term and the directors have concluded that there is no longer any reasonable prospect of a sale.
‘Therefore, the directors have had no choice but to appoint administrators.
‘The administrators are working closely with employees affected by the closure of the business to ensure they receive the support they need during this difficult time to assist with their claims for redundancy and other compensatory payments.
‘Our priority is to ensure that all employees made redundant are assisted in processing their claims with immediate effect.’