Northeast

AG New England Acquires New Customers in Maine

AG of Maine shutdown left retailers without supplier

by Ashley Bates/staff writer

[frame_left src=”https://www.theshelbyreport.com//wp-content/uploads/2011/05/AGMAINE-bourgoine.jpg” href=””] Mike Bourgoine,
AG of New England
[/frame_left] Mike Bourgoine, president and CEO of Associated Grocers of New England, called the recent addition of 81 new Maine retailers to his company’s distribution business “a once-in-a-lifetime” opportunity.

After 57 years in business, Associated Grocers of Maine (AGME) recently shut its doors. The closure of the Gardiner-based company left about 100 people out of work and nearly 300 stores in need of a supplier.

AG New England expects about 10 more stores to sign on with the cooperative in the future, Bourgoine said, which will mean a total of 90-plus stores will have been added to his company’s account base.

Bourgoine says AG New England already has hired several former AGME employees and is talking with others about job opportunities.

“We’ve hired four counselors—sales/road people so to speak—and three of their drivers,” he said.

Bourgoine also wanted to make it clear that AG New England is not in any way associated with AGME.

“Both companies, along with other distributors, do sell Shurfine store brand products as joint members of the Western Family Holding Company,” he said.

“But AG New England is a separate company, and our ownership and operations are not affiliated in any way with Associated Grocers of Maine.”

AG New England, headquartered in Pembroke, N.H., is the largest retailer-owned wholesale grocery distributor in the region, servicing more than 600 accounts across the New England states and into the Upstate New York/Albany area and operating from a recently constructed state-of-the-art distribution center.

The cooperative serves independent retail food stores in Maine, Connecticut, Rhode Island, Massachusetts, New Hampshire and Vermont.

“We were covering the full state of Maine before this happened; we already had in place our what we call a ‘shuttle run’ arrangement every day,” Bourgoine said. “We’ll ship full trailers to a drop point in Maine and then we have a resident driver there who takes it the rest of the way and delivers it that morning to the most northern parts of Maine. We were in the whole state anyway so it didn’t pose a lot of problems. It was mostly finding the equipment and the drivers.”

The quick closure of AGME caused many problems for retailers, Bourgoine said.

“It was a real scramble, the retailers…well, they were aware that something was going on. So we were prepared to move quickly…They had 240 customers, I believe, and we only targeted about 100 of them.

“We just cannot take on any more than we targeted,” Bourgoine told The Shelby Report. “We needed to be prepared and we were, and, again, we have the lion’s share of the business.”

Pine State Trading Co. has expressed a willingness to supply cigarettes, tobacco, candy and other c-store items to AGME’s customers, stated in a letter by the AGME receiver Jim Ebbert.

Additionally, Pine State Trading will accelerate credit requests for AGME’s customers.

Ebbert could not comment further on any of AGME’s current financial or legal status.

In a letter posted on AGME’s website on May 2, Ebbert explained some of the events leading to the wholesaler’s abrupt closing.

“As many of you have heard or read, certain events transpired last week regarding Associated Grocers of Maine Inc. One of the company’s two secured lenders, Savings Bank of Maine, commenced litigation against the company in the Superior Court of (Kennebec County) Maine. In connection with that litigation, the Court issued an order appointing me as Receiver for the assets pledged as collateral for the Bank’s loans to the company.

“AGME has outstanding loans with two secured lenders. It appears that all of the company’s assets have been pledged to one or both of these lenders.

“Consequently, a decision has been made to orderly liquidate the company’s assets so as to maximize the value of those assets for all creditors.

“This decision was not made lightly in view of the impact it would have on the company’s employees, vendors, customers and shareholders.”

Daniel Walsh of Teamsters Union Local 340 in Portland, Maine, told The Morning Sentinel that his union represents 70 of AGME’s more than 100 employees.

“AG was an exemplary employer,” Walsh said in the report. “These were good jobs that paid a living wage, had health benefits and a pension—anything anybody would want in a job.”

Justice Robert Murray appointed a receiver “to wind up the business,” which court papers say is more than $6 million in debt to Savings Bank of Maine.

AGME has been in financial trouble for at least three years, court documents indicate. In March 2008, the bank agreed to permanently increase the company’s line of credit to $9.5 million. But a document signed almost a year later reduced that to $8 million.

“AGME’s failure to pay debts as they became due, as well as the fact that its business operations have deteriorated, indicates that AGME is incapable of operating the business or maintaining collateral in a manner which will maximize value and ensure payment on the note,” Savings Bank of Maine SVP Alvin W. Butler wrote in an affidavit requesting the receiver.

About the author

Kristen Cloud

A former newspaper editor and publisher who has handled digital duties for The Shelby Report since 2011. She once enjoyed leisurely perusing the grocery store aisles but, since having a baby in 2016, is now an enthusiastic click-and-collect shopper.

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