Food manufacturing business collapses as grocery council warns of industry in decline

A food manufacturing company has collapsed in South Australia, highlighting the fragile nature of both industries as businesses struggle to compete with the higher Australian dollar and lower demand for services.

The collapse also comes as the Food and Grocery Council has released a new report in which it argues up to 130,000 food manufacturing and processing jobs could be lost within the next 10 years if the Government doesn’t assist the industry.

In South Australia, ingredient supplier and manufacturer Inpak Foods was placed into receivership as of October 19, with receivers already asking for expressions of interest.

Sam Davies and Rob Kirman of McGrath Nicol have been appointed as receivers. Both were contacted this morning – along with the company itself – but no spokesperson at either location was available prior to publication.

In a statement to customers, both receivers have said the company has continued to trade “business as usual” until the company is either restructured, or sold. A note to creditors and suppliers has also been circulated, confirming the same.

The business itself has been running since 1990, and offers a number of ingredients for bakeries, seafood producers, along with dairy ingredients. It also sells kitchen utensils and other materials for preparing food.

The company says it has partnered with several large firms including ADM, Bonlac and Halcyon, and at one point wanted to expand through the East Coast.

Several of the company’s assets including office and warehouse facilities, with fresh and frozen storage capabilities, plant and equipment, stock and many supplier relationships are being offered.

The collapse highlights the fragile nature of the manufacturing industry, which has continued to suffer under the high Australian dollar. Figures released yesterday by the Australian Industry Group confirmed its decline.

The Food and Grocery Council also released new figures today showing the industry could lose 130,000 jobs by 2020 if nothing is done by the Government. In a report compiled by AT Kearney, it argues that turnover is forecast to fall 0.2% every year over the next decade.

“Over that same period, retail demand is due to grow at 3.7% per annum with the growth gap being increasingly filled by imports and retailers’ private label products,” the report states.

Chief executive Kate Carnell said the report issues a stark warning to legislators to save the industry.

“Consumers want to be confident about buying affordable food and grocery brands, that they know and trust. I urge all political leaders – both Federal and State – to seriously consider this report and reconsider the current business-as-usual approach towards the sector.”

The report claims towns in rural Victoria, New South Wales and Queensland will be hit hardest by unemployment.