Aussie Farmers Direct closed for business

Posted by AFN Staff Writers on 5th March 2018

Australian grocery deliver Aussie Farmers Direct has entered into voluntary administration and closed its doors for business effective immediately.

After 13 years of operation, Aussie Farmers Direct placed a notice on its website Monday 5 March 2018 announcing the closure, a move it referred to as “hugely disappointing”.

According to the appointed voluntary administrator, Korda Mentha, approximately 100 franchisees, 260 employees and 100, 000 customers will be impacted by the closure.

No further orders or deliveries will take place with Aussie Farmers Direct saying customers waiting on orders will receive refunds shortly.

In its closure statement, Aussie Farmers Direct thanked all of its customers, farmers, franchisees, suppliers and staff for their support.

“After 13 years of working with many of Australia’s great farmers and delivering their fresh produce to Australian families, it is hugely disappointing that it has come to this.

“We are simply no longer able to compete against the domination of the major two supermarkets and the influx of cheap imported produce,” Aussie Farmers Direct said.

The only part of the Aussie Farmers Direct business that will continue to operate is its Home Delivery Services division.

Home Delivery Services is a logistics service that provides last-mile delivery services.

Craig Shepard from Korda Mentha said a number of options had been explored to try and keep Aussie Farmers Direct doors opened, including recapitalising, finding a strategic partner and selling the business.

All avenues were however not enough to “safeguard the company’s future” Shepard said.

“Unfortunately, it is not possible to continue trading and the business will stop operating immediately,” Shepard commented.

Aussie Farmers Direct began 13 years ago as a home delivery service for fresh milk, cheese, bread, and juice in Victoria. Over the next five years it expanded to NSW, Queensland, Western Australia, South Australia and the ACT.

By 2010, it had been named by Business Review Weekly as the fastest-growing franchise in Australia. Then it introduced organics to its range of local produce. Two years ago, it challenged the supermarkets by offering thousands of grocery items.

Shepard said the company struggled to compete with the big supermarkets in a tough retail environment exacerbated by low wage growth. Directors believed their ability to sell local products was hampered by the promotion of low-cost imported products sold by their opposition.

Sheppard further stated that “there was little cash in the company” with most of the company’s debt was held by entities associated with local and overseas investors. There was no significant bank debt. A meeting of creditors will be called next week.

 

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