Brexit vote forces salad firm to close: 250+ job losses

17-Aug-2017 - Last updated on 18-Aug-2017 at 11:44 GMT

Southern Salads entered administration with almost 260 job cuts

Salad supplier Southern Salads has entered administration and “all but a handful” of its 260 workers have lost their jobs, after the value of sterling plummeted following the Brexit vote.

The Tonbridge, Kent-based business ceased trading after appointing administrators, it was revealed this week (August 16). Southern Salads had been under pressure since the result of last year’s EU referendum, as it relied on imports from a number of European countries, administrators said.

Joint administrator, from FRP Advisory, 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.

‘EU referendum vote’

“Despite successfully producing over 50t of salad a 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.”

Southern Salads held unsuccessful talks to increase its prices to supermarkets, in a bid to pass on some of its cost increases. It also failed in talks to reduce its costs paid to its European suppliers, which were based in the Netherlands, Poland, France, Italy and Spain.

Cash flow became unsustainable

The salad firm approached administrators after investment and pricing talks broke down recently. Cash flow became unsustainable, leaving it with no alternative than to enter administration, FRP Advisory said.

Most of its 260 workers were made redundant, the administrator said. The company’s assets are already being sold.

Vickers said: “Southern Salads has a wide array of relationships with a number of customers, and has been trading from premises in Tonbridge since 1996. It has benefitted from a number of investment and improvement projects over the past decade.

“As administrators, our immediate priority is to assist all those made redundant with timely claims to the Redundancy Payments Service.”