Independent grocery retailer Haldanes has begun legal proceedings of its own against the Co-operative Group after the Co-op started an action to recover unpaid rent.
Haldanes issued a statement today alleging that the Co-op has “materially breached” the terms of a deal under which Haldanes acquired 26 former Somerfield stores in late 2009, and in doing so, has also breached undertakings it gave to the Office of Fair Trading. It has accused its larger rival of having “a real interest in driving Haldanes out of business”.
However, the Co-op had already issued proceedings of its own to reclaim unpaid rent on the stores. “Our decision to take legal action followed Haldanes’ failure to pay rents owing to the group and was made reluctantly after other avenues had been exhausted,” it said in a statement. It said it had yet to receive any proceedings from, Haldanes, but briefed the OFT on the dispute because the disposal came as a result of its findings.
Haldanes’ chief exective Arthur Harris claims that the Co-op did not make Haldanes “fully aware of the true trading picture” of the 26 stores, saying that if it had, Haldanes would not have gone through with the transaction. He said that over the last four months he has had to invest £2m into Haldanes to ensure the business could continue and staff could be paid.
Harris said the Co-op had refused requests to discuss the issues over a meeting, and alleged it “would much prefer to see Haldanes go bust than address the issues arising”.