PMP has been dealt another blow to its attempt to resurrect its business and battered reputation, with Coles dumping the company in favour of rival Salmat.
PMP has been dealt another blow to its attempt to resurrect its business and battered reputation after a scandal-plagued year, with Coles dumping the company and awarding its $15 million national catalogue distribution contract to rival Salmat.
It is believed PMP and Salmat were advised of the outcome of Coles' review of its catalogues distribution on Wednesday.
The printing and marketing group has lost a string of contracts with large companies this year after the discovery that some clients had been overcharged and a significant number of customer catalogues were being delivered late or dumped in garbage bins.
As the scandal spread, client losses mounted.
Kmart, the discount department store chain owned by Wesfarmers, switched its contract to distribute its catalogues from PMP to Salmat, costing PMP an estimated $15 million a year.
A $10 million-a-year contract to print and distribute catalogues for department store owner Myer was also taken away.
As part of the industry upheaval triggered by allegations against PMP, Coles had already moved its catalogue distribution business to Salmat, but was yet to decide on a permanent home for the contract.
This week the food and liquor group finally formalised its relationship with Salmat.
It is believed Coles is also reviewing its $30 million-a-year catalogue printing contract, which at present is handled by a consortium of printers made up of PMP, Independent Print Media Group, AIW Printing and Franklin Press.
Yesterday, a Coles spokesman said: "Following a tender process, Coles has awarded its national catalogue distribution business to Salmat.
"The contract term runs for two years. Coles distributes approximately 7 million catalogues each week to homes across Australia. Salmat have been managing Coles' catalogue distribution business since January 2009."
It has been reported that PMP's share of the catalogue distribution market in Australia fell to 35 per cent from 50 per cent in 2008-09, while Salmat's share rose from 50 per cent to 65 per cent.
