Food icon Rosella collapses, receivers set to try flogging dead horse
Tuesday, December 4, 2012/
The manufacturing industry has taken another victim. Gourmet Group, the company which owns the iconic tomato sauce brand Rosella Foods brand alongside several others, has been placed in receivership as the company continues to struggle against the harsh manufacturing environment.
Around 275 jobs are in jeopardy due to the collapse, with the company owing millions to several creditors including the National Australia Bank. Reports indicate the amount could be as much as$50 million.
Ferrier Hodgson has said it’s too early to tell whether there will be any job losses.
Greg Evans, head of economics and industry policy at the Australian Chamber of Commerce and Industry, told SmartCompany this morning the manufacturing industry is clearly experiencing a “difficult adjustment period”.
“One of the major issues contributing to that is the strength of the Australian dollar, along with a number of rising costs including energy. We’re likely to see job shedding in the sector, given the current outlook.”
The collapse of Gourmet Food Holdings has a connection to the recent collapse of the Allans Billy Hyde music chain – both shared the same backer, Crescent Capital. Allans Billy Hyde was recently bought out and will remain trading.
Ferrier Hodgson announced the receivership of the Gourmet Group yesterday, with partners Steve Sherman, Jim Sarantinos and John Lindholm appointed to the company after creditors failed to find a suitable buyer. The partners have already put out requests for expressions of interest in the business.
The company has been described by the receivers as a “leading food manufacturer” with revenues of about $87 million.
Its brands include Rosella, Galiko, Aristocrat, the Curry Makers, Blue Banner Onions and Stromboli branded condiments. It also owns several brands in New Zealand, including the organic soups and meals maker Pitango, and operates a manufacturing base there.
Within Australia, the business operates manufacturing efforts in New South Wales and Victoria.
”The receivers will be undertaking an urgent assessment of the financial position of the group. We’re going to do what we can to preserve jobs,” Sherman says in a statement.
”We will be engaging in discussions with key stakeholders including employees, customers and suppliers to determine whether operations can be continued.”
The business is one of several companies in the food industry to recently collapse – a supplier of ready-made products, Australian Convenience Foods, was placed in administration in August and confectionary icon Darrell Lea fell over in July.
The Australian Manufacturing Workers’ Union has already expressed its distress about the receivership, although Ferrier Hodgson has implemented an immediate sale process.
The Opposition has latched onto the announcement, with spokeswoman for industry Sophie Mirabella saying the collapse was evidence that Labor has failed to introduce reforms for manufacturers.
“Manufacturing in Australia is in crisis and this economically negligent Labor government continues to stand by as our manufacturing sector collapses,” she told the AAP.
But Greg Evans says there isn’t likely to be much relief any time soon.
“For those trade-exposed parts of the economy, like manufacturing and tourism, they’ll be looking to things like lower interest rates,” Evans says.
“The short to medium outlook continues to be very challenging for them.”
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