Coca Cola resumes supplies to Mega

Mega
Mega

Troubled Israel supermarket chain Mega is demanding a return to normal credit terms with its suppliers.

A week after halting supplies to troubled supermarket chain Mega, The Central Bottling Company (Coca Cola Israel) has resumed supplies to the chain, Mega said at the weekend. According to the chain, the company's products, including those of dairy Tara, will once more be supplied to its branches regulalrly. Mega is also close to an understanding with Strauss Group Ltd. (TASE:STRS), which made only restricted supplies to the chain last week.

Coca Cola Israel's decision to resume supplies to Mega came after it received the financial sureties it demanded from Mega's parent company Alon Blue Square. The sides did not disclose how much money was involved.

In a meeting with suppliers last Thursday, Alon Blue Square CEO Avigdor Kaplan said he would not discriminate in favor of any supplier. The meeting took place at Kaplan's request, and Mega CEO Raviv Brookmayer also attended. Suppliers who took part in the meeting told "Globes", "We heard nothing new at the meeting that we hadn't previously read in the newspaper. Kaplan said something along the lines of 'We've reached agreement with the banks and bondholders and now it's your turn'." Kaplan meant the chain's demand that suppliers should supply goods on the credit terms that held before the crisis hit in the summer. A source at Mega told "Globes" that the chain could not continue to function without a return to the number of credit days it had previously. "Sunday will be the critical day for the chain. We'll see who delivers supplies and who doesn't," the source said.

On Friday, Mega transferred over NIS 100 million to suppliers, and it is due make a further payment of NIS 70 million, which it says it will meet.

At the end of last week, there were obvious gaps on Mega's shelves, and it is estimated that sales last week were down about 7%.

Mega said in a statement at the weekend, "Following the parent company Alon Blue Square's agreement with the bondholders and banks, and its announcement that it will meet all its commitments to Mega as determined in the court settlement, Mega continues its day-to-day activity, and is operating in accordance with the normal terms of trade and credit agreed with each supplier before the court settlement. We continue to implement the recovery plan, and this is the time for the chain's suppliers to put their faith in the company, on the understanding that a strong Mega is vital for maintaining a robust and competitive market."

Published by Globes [online], Israel business news - www.globes-online.com - on November 8, 2015

© Copyright of Globes Publisher Itonut (1983) Ltd. 2015

Twitter Facebook Linkedin RSS Newsletters גלובס Israel Business Conference 2018