Insurer cuts off credit insurance to certain suppliers of Tiv Taam
Chain responds that it's only two suppliers with which it doesn't do business anyway
Clal Credit Insurance has advised certain suppliers that it is no longer prepared to insure their future sales to Tiv Taam Industries and to Tiv Taam Chains, TheMarker has learned.
The insurer told the suppliers seeking more information, that the company had taken a decision not to increase credit insurance on transactions with Tiv Taam.
Any deterioration in the business of a company with insured cash flow results in a higher premium that the insurance company charges from suppliers. A stronger response is to stop selling relevant policies entirely.
For Clal Credit Insurance to scale back credit insurance to suppliers of Tiv Taam could indicate that the insurance company feels the chain's business has deteriorated.
Clal Credit Insurance commented that at this stage, the company is adjusting Tiv Taam's credit insurance.
Tiv Taam commented: "Clal Credit Insurance sent letters to two suppliers in the course of adjustments it is making. Tiv Taam has not had business relations with either supplier for months."
The non-kosher supermarket chain found itself in the headlines after a consumer affairs TV show, Kolbotek, taped butchers at three of its branches doctoring rotting chicken with spices to hide its foul order and bad color, and selling the product as shwarma or "spicy nuggets". The chain did not try to deny the allegations, though it claimed they had been specific problems at the branches, not policy, and it apologized profusely to shoppers.