Small Grocers Staggered as Co-op Folds



ELLSWORTH — The abrupt closure of Associated Grocers of Maine (AGM) last week left store owners throughout the area scrambling to keep their shelves stocked.

But the inconvenience of finding another supplier pales in comparison to the ruinous aftershocks.

 

Frustration felt by grocery store owners when they found out their supplier had closed shop turned to anger, resentment and bitterness as they realized that their money, their way of doing business and their reputations went down with the cooperative food distributor’s demise.

“Your entire financial existence is wrapped up in the company,” said John Bannister, owner of Merrill & Hinckley grocery in Blue Hill. “When it goes down, it affects the relationship you have with vendors. We’re looking at losing a ton of money and they’re looking at us like we just bounced three checks.”

The Gardiner-based food distributor closed its doors last Thursday, April 28, under a court order to liquidate. It was placed in receivership by the court because of its failure to pay bank debts reportedly in excess of $6 million.

Area grocers and convenience store owners say they were blindsided by the abrupt closure, which they had heard nothing about until last Wednesday or Thursday.

AGM, a cooperative food distributor, was founded in 1953 with 44 members. When it closed, membership had grown to more than 300 stores. The co-op employed some 140 workers at its distribution center in Gardiner.

In addition to distributing Shurfine and other grocery and tobacco products to stores across Maine, AGM operated as a central billing facility. Individual vendors would supply stores in the AGM cooperative, and then bill AGM for the products.

The collapse of that function caused substantial money losses to co-op members.

For more business news, pick up a copy of The Ellsworth American.

 

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