Suppliers to Irish supermarket chain Superquinn which is in receivership, received a boost with the news that the chain’s new owner, the Musgrave Group, is to provide €10m to pay outstanding debts.

The Musgrave Group estimates that suppliers are owed less than €20m, so depending on credit insurance, they could receive 65-70 cents for every euro owed.

Irish Farmers Association (IFA) president John Bryan welcomed the move, and said it could be the difference between viability and bankruptcy for many suppliers.

Mr Bryan also called for the government to review credit term arrangements between supermarkets and suppliers, and suggested there should be a provision in the code of practice for payments to be made within 21 days.

“Under existing conditions, retailers have been hoarding vast amounts of cash, while suppliers have to wait for payment. This allows the supermarkets to earn substantial interest, but puts pressure on suppliers who have to meet their own bills,” he said.

Irish poultry producers Carton Brothers and egg company Greenfield Foods were both left out of pocket when the retail group went into receivership, but backed the Musgrave Group proposals as it was a large employer in Ireland with a strong reputation.

The Musgrave Group runs a wholesale business and accounts for up to 25% of the Irish retail market through its Centra and Super-Valu retail chains. Superquinn has just over 6% of the market and a strong presence in Dublin.