(Alliance News) - Claims that B&M European Value Retail SA stopped purchasing products from a supplier as "retaliation" for an investment bid breaking down are "wholly without merit", the discount chain has told the High Court.

The Skinny Food Co is suing B&M for at least GBP13.8m in damages over it being "de-listed" as one of the chain's suppliers in 2021 and 2025, meaning B&M either stopped buying Skinny's products or significantly reduced how much it bought.

In court documents filed earlier this year, Skinny claimed the moves were in breach of rules and that the 2021 de-listing was "retaliation" for the breakdown of an investment in Skinny by the Arora family, some of whom directed B&M at the time.

In a defence to the claim filed on Thursday, barristers for B&M said it was "impossible" for it to "plead a proper response" as Skinny's claim was "embarrassing for want of particularity".

Harry Gillow, for B&M, said in court documents that the legal claim was partly based on allegations of a "conspiracy", but continued: "It is to be inferred that Skinny has dropped this cause of action due to the absence of any evidence to support it."

He added: "In the circumstances, it is inappropriate for Skinny to maintain that pleading, which is improperly particularised, lacks any evidential foundation, and is wholly without merit."

Gillow also said that B&M stopped buying products from Skinny for "genuine commercial reasons" and that it had not "in any way failed to deal fairly" with the supplier, adding that the sums claimed are "manifestly excessive and entirely without foundation".

In documents setting out Skinny's claim, George Spalton KC said that it supplied B&M with more than 50 products from late 2020, including spreads, sauces, ready meals and cocktails.

He continued that in 2021, Robin Arora – a director of B&M until 2022 – told Skinny's directors that the family was keen to invest in the company.

Spalton claimed that in one message, Arora made "express threats" to Skinny's directors that he could not "guarantee continued B&M support" if the investment did not proceed.

After negotiations broke down, B&M "significantly reduced the volume and value" of orders it placed with Skinny in September 2021, from a value of GBP10.7 million in the year to August 31 2021 to around GBP3.2 million the following year.

Spalton said that B&M did not provide notice or reasons for its 2021 decision to "de-list" Skinny, in breach of rules, and that the move was "retaliation for the negotiations in respect of the Arora family investment having broken down".

B&M stopped listing new Skinny products from 2023 and stopped placing orders last December, which Spalton said was caused by the chain's "desire to punish Skinny".

But Gillow said in B&M's defence that the alleged investment proposal "lies outside of B&M's knowledge" and that Arora "acted at all material times solely in a personal capacity".

He also denied that messages between Arora and Skinny's directors contained "any threat, either explicit or implicit" or that Arora "would have, or was indeed capable of, acting to bring about adverse commercial consequences for Skinny".

He said: "Any reduction in sales of Skinny's products by B&M was the result of poor commercial performance of those products and/or Skinny's own commercial failures, and all de-listings of Skinny's products were for genuine commercial reasons."

Gillow added that Skinny had failed "to identify the product lines said to have been de-listed without reasonable notice in 2021, what notice is said to have been required, and the specific loss or damage said to have resulted from the absence of notice".

The barrister also said that prior to formally launching legal action, Skinny had threatened to sue for more than GBP38 million in damages, before reducing the figure.

A hearing in the claim is yet to take place.

B&M shares were up 0.2% at 173.64 pence each on Friday afternoon in London.

By Callum Parke, Press Association Law Reporter

Press Association: Finance

source: PA

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