Finance / Jobs lost as Brexit-hit pound forces Southern Salads into administration
Jobs lost as Brexit-hit pound forces Southern Salads into administration
17 August 2017
Around 260 jobs have been lost at food supplier Southern Salads after the Brexit-hit pound forced the company into administration.
FRP Advisory has been appointed administrators of the Kent-based firm, which will cease trading immediately, leaving hundreds of staff out of work.
The family-run company operated for 30 years, weathering "competitive pricing pressures from supermarkets and other retail chains", and had invested heavily in its production facilities in 2014.
However, the expected increase in turnover never materialised following those investments, and the business was not able to ride out the effects of the Brexit vote which increased the cost of overseas greens.
"Despite successfully producing over 50 tonnes of salad per day for its array of customers, the company faced an unprecedented pressure on cash flow in the immediate aftermath of last summer's EU referendum vote," joint administrator and FRP Advisory partner Ian Vickers said.
“The sudden decline in sterling was not foreseen by the company, leaving the business grappling with an immediate fall of between 10% and 20% in its purchasing power for overseas-grown salads required for the winter and early spring UK market, which in turn put a severe strain on cash-flow.”
Southern Salads failed to negotiate new pricing terms with European suppliers of fruit and vegetables in countries including Poland, the Netherlands, France, Italy and Spain – and without sufficient currency hedging in place, collapsed under rising costs.
Market jitters have resulted in a major devaluation of the pound in the wake of the Brexit vote, with the UK currency dropping more than 16% from its pre-referendum high of 1.31 against the euro to lows of 1.09.
FRP said its “immediate priority” would be to help all staff who were made redundant as a result.