Metcash have reportedly been warned they should consider reassessing the viability of their food distribution business.

The move would boost margins for retail partners and de-risk the business, Credit Suisse analyst Grant Saligari reportedly told clients this week, according to a report in The Sydney Morning Herald.

It comes after Metcash lost their long-standing supply contract for 7-Eleven last year, worth a reported $800 million, and their loss of the South Australian Drakes distribution deal in 2018.

They continue to supply IGA, independent grocers Foodland and select c-stores and has holdings in hardware and supplies select liquor stores.

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