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Distribution Shakeup Continues

Ownership of two popular distribution companies changed hands in a matter of weeks as major distributors continue jockeying for new business in competitive Midwest markets.

Marsh Supermarkets Inc. yesterday said it signed an agreement to sell its Convenience Store Distributing Co. (CSDC) to McLane Co. Inc., the largest grocery distributor serving the convenience store and petroleum industry. Terms of the deal were not disclosed.

The sale includes inventory, property, buildings and equipment plus the assumption by McLane of certain liabilities, which also were not disclosed.

The deal is significant for McLane because it gives the Temple, Texas-based company the distribution rights to Marsh's Village Pantry convenience store division, which includes 200 units, and CSDC's current customers.

However, Marsh "will continue to self-distribute most products to our supermarkets and look forward to a mutually rewarding relationship with McLane," said Don Marsh, chairman, president and CEO of Marsh Supermarkets. "We decided to focus on our core retailing businesses and redeploy our assets and energies accordingly."

Marsh's decision to sell comes just one week after Leitchfield, Ky.-based Miller & Hartman LLC sold its distribution business to Marshfield, Wis.-based Fleming Cos.

Fleming paid approximately $4 million for warehouse facilities and inventory in Leitchfield, including the real estate. The Leitchfield facility currently generates $400 million in annual revenue. The company also operates 70 Marsh supermarkets and 29 LoBill food stores.

"This acquisition is yet another example of our strategic move into the convenience store distribution business," said Mark Hansen, chairman, president and CEO of Dallas-based Fleming. "The Miller & Hartman business is a particularly good opportunity for Fleming because it expands our reach into important new states, especially Kentucky and Tennessee.

Fleming currently operates dedicated c-store distribution warehouses in Pennsylvania, Illinois, Wisconsin, Minnesota, and Kentucky. Additionally, Fleming serves c-store businesses from its distribution centers in Lubbock, Texas and Sacramento, Calif.
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