Distribution powerhouse Westcoast has confirmed that Euler Hermes has reduced cover on several of its supplier credit lines, but has stressed that the move will not effect its business.

It is believed the broadliner is one of several IT accounts to which Euler has reduced exposure in recent weeks after conducting a case-by-case review of its UK business. The news came after the credit insurer announced it had cut its profit forecast for the fourth quarter after taking a hit from the collapse of Woolworths.

Westcoast chairman Joe Hemani insisted that the move would have “minus zero” impact on its business.

“The cover has been reduced to a level commensurate with what they require to trade. There is not a single supplier that wants cover and does not have the cover to trade with Westcoast,” he said.

Alastair Edwards, senior analyst at market watcher Canalys, said credit insurers could be over-reacting.

“Credit insurers tend to take a conservative approach during periods of uncertainty and it does not help the industry. It exacerbates the feeling of panic,” he said.

“To some extent the onus is pushed onto vendors to support their most important partners through payment terms, credit or reduced targets.”

Euler chief executive Fabrice Desnos declined to comment.