Growers cautious over analyst's forecast of buyout opportunity

Growers have responded cautiously to a report on the UK fresh-produce industry that claims firms in the sector face one of the biggest opportunities in a generation despite large losses.

They spoke out after analyst David Pattison said the sector was in a "grim" state, with a record number of companies losing money.Pattison added: "Overall, business values are plummeting. Almost half are now worth less than half their value of 12 months ago.

"But the current economic downturn represents one of the biggest opportunities in a generation, if you have the courage and the capital."

Plimsoll Publishing rated each of the UK's leading 1,000 fresh-produce companies, from growers and wholesalers to food processors, on their "acquisition attractiveness" and found 110 were "ripe for the picking".

The firm's senior analyst explained: "We identified a group of firms, many of which have a long, distinguished history, yet recent performance has deteriorated."

Anyone looking to grow their company through acquisition should home in on businesses that are currently undervalued yet, with help, could be turned around, he said. "But this will not be easy. Many will need rapid and deep cost cutting to get them back on a firm financial footing.

"We know of at least 465 companies within the industry that have the cash to spend and could aid these 110 ailing businesses and ensure their survival."

British Carrot Growers' Association chairman Martin Evans said: "I agree with the findings in some ways. Historically, our sector does better in a recession than others. But with pesticides and labour issues looming I don't know whether we will be that attractive."

British Tomato Growers' Association (BTGA) chairman Nigel Bartle said: "I would like to see who has the money to spend. Protected produce is more capital-intensive than broad-acre operations and, despite Thanet Earth, glass cover usage has gone down."

Processed Vegetable Growers' Association commercial manager Tim Mudge said: "Being under constant price pressure from your supply base will always leave some growers open to be picked off.

"But are the supermarkets going to be happy that company A chooses to buy B and C? They generally like to have things done their way."

BTGA executive officer Gerry Hayman said: "There might be opportunities for large-scale takeovers, but few people have the money and, therefore, the opportunity."


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