DBC administration costs 561 jobs with 213 at risk

Foodservice firm DBC entering administration has now caused 561 redundancies while another 213 jobs are at risk.

Original figures reported by FPJ suggested said 287 jobs had been slashed. But Russell Cash, a partner at DBC administrators Baker Tilly, has since told FPJ that 561 jobs have been lost.

He explained that DBC had grown significantly in the last three years and was on track to a record turnover if it had survived long enough to post its financial results for 2011.

But in the last two years the increased growth meant greater risk and the company accumulated losses of close to £10 million.

Cash said the losses meant the business began to suffer cash flow problems. “When the company began to lose money, credit became tight. The losses caught up in cash flow, credit insurers got nervous, people didn’t want to take the risk.”

The company was put on the market but when it did not sell the administrators were brought in to try to sell off the business. Within a day, the contract for food provision to the MoD, which DBC had held since 2006, was acquired by Vestey Foods, saving 200 jobs.

Vestey Foods’ UK deputy CEO Adam Cox said: “Our priority has been to ensure the continuation of the MoD food supply chain. The acquisition of the DBC Foodservice MoD contract will not only ensure that this can be achieved, but it will also safeguard over a fifth of the total number of DBC’s UK staff.”

The following day, Baker Tilly sealed a deal to sell part of the firm to foodservice business Brakes.

“We did conclude a transaction with Brakes that sees deals with 18 customers,” Cash said. “That doesn’t sound huge but it’s 50 per cent of residual volumes.”

Brakes has its own infrastructure and will not be taking on any DBC staff.

Although 561 people have been made redundant and 200 employees moved to Vesty, a remaining 213 people may still find themselves jobless.