Southern Salads goes into administration

Hundreds of jobs in the UK's fresh produce sector have been lost following the collapse of leading salad supplier, Southern Salads.

The Kent-based, family-run business provided prepared salads and other prepared fresh produce products to the UK’s food service, food manufacturing and travel sectors.

It sourced its salads and vegetables from UK growers, including the fourth-generation Kentish salad grower – and 2015 Grower of the Year winner – LJ Betts, with which it had a long-standing partnership.
It also sourced products from elsewhere in Europe including Spain, Italy, Poland, France and Holland.

But administrators FRP Advisory have this week confirmed that the majority of Southern Salads’ 260 members of staff have been made redundant after the firm ceased trading as it struggled to cope with the impact of the weak pound.

FRP Advisory’s Ian Vickers’ said: "Southern Salads, a family-run Kent-based business, had traded for around 30 years, and managed over the years to deal with the increasingly competitive pricing pressures from supermarkets and other retail chains faced by all food supply businesses.

"The company invested heavily in 2014 to expand its production capability which put pressure on working capital and the expected increase in turnover never materialised. Turnover in 2016 reached over £30 million.

"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.

"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. With insufficient protection from its currency hedging arrangements, pressure increased on cash-flow as the business traded through to this spring."

"The company was unsuccessful in negotiating any significant changes to its pricing terms with its suppliers in mainland Europe, while also being unable to pass on its cost increases to supermarkets and its other customers."

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