Tonbridge-based supplier Southern Salads has gone into administration, with the company blaming the post-referendum devaluation of the pound for its collapse.
The 31-year-old family business ceased trading with immediate effect on Wednesday (16 August) and administrators FRP Advisory said a rescue package had not been possible.
All but a handful of the company’s 260 staff have been made redundant and administrators said their immediate priority was to assist everyone that had been laid off with claims to the Redundancy Payments Service.
The company, which supplied prepared salads, vegetables, slaws and fruit to the foodservice, food manufacturing and travel sectors, had invested heavily in its production facilities in 2014, but this did not result in the expected rise in turnover.
The firm produced more than 50 tonnes of salad a day for its customers.
Ian Vickers, joint administrator and partner at FRP Advisory, said: “The company faced 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 per cent 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.”
He added: “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.
“The company relies on European suppliers for fresh vegetables and fruit, from the Netherlands and Poland in the north to France, Italy and Spain in the south.”