Local food producer enters administration
Family-owned company Spring Gully Foods has gone into voluntary administration, leaving the future of more than 40 jobs uncertain.
The Adelaide business says the loss of a major contract late last year and changing market conditions put it under severe financial stress, contributing to debts of more than $3 million.
The fourth-generation company specialises in pickled foods, jams and sauces and supplies products to Coles, Woolworths and Aldi, but would not reveal which of its contracts had been terminated.
The business was established in 1946 at Rostrevor but moved to Dry Creek in 1993.
It releases produce under the Spring Gully, Gardener and Leawood Farms brands and is hoping it can trade its way out of difficulties.
Managing Director Kevin Webb says he is not sure what caused the dip in sales.
"It is just something out there that is, for some reason, the market slowed for our products, and we're still trying to find out why," he said.
"We've got our people out there right now trying to source, trying to find out why our products slowed. Spring Gully products itself started to pick up this week, through draws on the orders coming through, but overall it was too much, too fast."
Mr Webb became emotional when he recalled breaking the news to his staff.
"They are so supportive, they are in shock like all of us. They are a wonderful bunch of people that we deal with, some of them have been with us for 30 years," he said.
"It's very tough to have to tell them yesterday that we had to put the company into voluntary administration."
Employee Maria Dente has worked for the company for 27 years and says employees were informed on Thursday afternoon.
"They called us all into the lunchroom, and explained to us what was happening and yeah, but anyway, we've got to keep positive and move forward," she said.
Rising costs
Industry body Food South Australia says the company's situation reflects the dire situation being experienced by other food processors.
Food SA's Chief Executive Catherine Barnett says action is needed to ensure other local businesses do not follow suit.
"We've got increasing cost of doing business and regulation, and I think that's something that could be looked at at both a state and a federal level," she said.
"The high dollar, of course there's nothing we can do about that, but that is absolutely punishing the industry in terms of having options to diversify. So there's a whole range of things that are causing a real challenge for the food industry."
Premier Jay Weatherill says the Government has been in contact with the business.
Mr Weatherill says it is up to consumers to support local products.
"We do have a vibrant independent grocery sector here in South Australia, I think one of the largest in the nation, and I think many South Australian companies have had their start, and have actually been able to maintain their existence because of the strong support of locals," he said.
The company sponsors the state's premier brass band, Kensington and Norwood Spring Gully Brass.
Source: ABC News, 12 April 2013
