Around 2,500 people have been made redundant in the run-up to Christmas after the wholesale firm Palmer & Harvey collapsed.
The company delivered supplies including cigarettes, alcohol and confectionery to Tesco supermarkets and thousands of small stores, but it had been struggling with cashflow.
Administrators at PwC confirmed the firm had been placed into administration after attempts to obtain a lifeline through fresh funding or a sale of the company failed.
A statement said that around 2,500 of the company's 3,400 staff had been made immediately redundant.
The remaining 900 jobs are also at risk, with PwC saying they have been tasked with assisting administrators in bringing the business to an "orderly closure".
Matthew Callaghan, joint administrator and PwC partner, said: "This is a devastating blow for everyone who has been involved in the business.
"The administration team will focus on working with employees, clients and suppliers to facilitate a smooth and effective wind-down or transfer of operations over the next few weeks."
He said the company had been facing a "challenging trading environment" and its directors had "no choice but to appoint administrators" after they ran out of cashflow to continue trading and concluded there was "no longer any reasonable prospect of a sale".
"The administrators are working closely with employees affected by the closure of the business to ensure they receive the support they need during this difficult time to assist with their claims for redundancy and other compensatory payments," he added.
"Our priority is to ensure that all employees made redundant are assisted in processing their claims with immediate effect."
A statement from PwC said it was still hoping to find a buyer for the firm's smaller subsidiaries P&H Direct Van Sales Limited, P&H Sweetdirect Limited and P&H Snacksdirect Limited.