Palmer and Harvey (P&H) had extended its distribution contract with Tesco by three years, amid refinancing talks with tobacco manufacturers.

The contract will cover the distribution of tobacco products to every UK Tesco store; ambient non-tobacco lines to all Tesco petrol forecourt sites; and frozen food lines (including in-store bakery) to over 1,700 Tesco Express stores.

P&H CEO Tony Reed said: “We are delighted to further extend our multi-year relationship with Tesco and we look forward to working with the Tesco team to maximise efficiency and provide great service over the coming years.

“The combination of resources from the two businesses is proven to deliver a first-class retail offer for Tesco customers”.

Tesco’s UK distribution director Andrew Woolfenden said: “We look forward to building on our long-standing partnership with Palmer and Harvey, and continuing to work and innovate with them to serve our customers better.”

P&H is currently in refinancing talks with JTI and Imperial. JTI head of communications Jeremy Blackburn said: “Palmer & Harvey is one of the key wholesalers of our products in the UK and we are currently in discussions with its management team to develop future business plans.”