UK food wholesaler supplying Morrisons and Co-op collapses with £5m debts

A major UK wholesaler that supplied food to Morrisons, Co-op and numerous other retailers has shut its doors after falling into liquidation.

The firm was established in the mid-nineties, originally trading as Food From Scotland Ltd, with a focus on delivering wholesale products to small independent Scottish retailers.

In the early 2000s, the business underwent further changes, rebranding as Enterprise Foods Ltd in 2001 as it broadened its reach across the UK.

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It then changed its name once more to the Localist – The Food Merchant last year.

Yet within less than a year, the company had collapsed into liquidation with debts exceeding £5million, resulting in 71 job losses, according to The Grocer.

George Lafferty of financial and real estate advisory firm BTG was appointed as liquidator, charged with attempting to settle the company’s outstanding debts and wind up its affairs.

This came despite efforts by company bosses to turn the business around and avoid redundancies. In a statement released in March, Thomas McKay, managing partner of BTG in Scotland and Northern Ireland, revealed that directors had attempted to restructure the debt, but when this proved unsuccessful, the job losses were “sadly inevitable”.

“There are many small suppliers to the business that are owed money, and the loss of this route to market will also have a serious knock-on effect on these food producers as well,” he said. McKay said at the time that BTG was “working to assess all claims and establish whether there will be any dividend paid to unsecured creditors, but it is not likely to be significant, given the level of secured debts in the business”, reports the Express.

Speaking about the job losses, he added that they were “working closely with those affected to help them access the financial entitlements and support available to them, including assistance from Partnership Action for Continuing Employment (PACE) and the Redundancy Payments Service”.

Both Morrisons and Co-Op told Convenience Store that they didn’t expect Enterprise Foods’ collapse to disrupt their supply chains.

Morrisons only collaborated with the firm for a limited range of products and said it was in talks with suppliers with a view to continuing the partnership “on a direct-to-store basis”.

Co-op had received supplies through Localist, but only for certain local food lines. In March, following Enterprise Foods’ collapse, Co-op started sending purchase orders straight to suppliers to avoid stock shortages.

It described this as an interim arrangement while it evaluated whether it would be suitable to forge longer term agreements, The Grocer reported previously.

A spokesperson for Co-op said: “As a community retailer Co-op takes great pride in offering local products in our stores and in backing Britain’s producers.

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“Following the unexpected news of Enterprise Food Ltd (EF) entering liquidation in March , as one of EF’s customers, Co-op believed it was right to act quickly and provide support and reassurance to the local, often smaller-scale, businesses affected.

“At the time, we put in place emergency, interim supply arrangements to secure supply and payments and we are delighted that we have now reached agreements for almost all of the individual small suppliers to continue to supply Co-op directly.”