Two of the UK's largest wholesalers, P&H and Makro, are to work together to try to get better prices from suppliers.

A new buying alliance, PalMak, has been formed which will see a team of buyers from both companies negotiating with manufacturers on behalf of their retail and catering customers. The new arrangement has been approved by the Office of Fair Trading.

The two companies have a combined UK turnover of £5bn, with P&H traditionally strong in the retail industry and Makro in the catering sector. Makro's parent company Metro is a partner in a number of similar buying alliances across Europe.

P&H commercial managing director Peter Austen commented: "P&H and Makro have many suppliers in common and the new buying group will enable us to develop existing relationships, increase volumes and improve efficiencies. This move underlines our commitment to ensuring we negotiate the best prices for our customers."

Makro commercial director Allard Sjollema added: "This is a model we have successfully implemented across Europe and we have seen the positive benefits from such co-operations."