FENLAND: Administrators say they have no option but to close MBMG and let staff go
By John Elworthy INDUSTRY experts began to vent their anger after the collapse of March-based MBMG and with it the loss of 100 jobs. The way the business has been run is a shambles, one disgruntled source told Fresh Produce Journal, the industry s on li
By John Elworthy
INDUSTRY experts began to vent their anger after the collapse of March-based MBMG and with it the loss of 100 jobs.
"The way the business has been run is a shambles," one disgruntled source told Fresh Produce Journal, the industry's on line magazine.
Administrators called in earlier this month have conceded there is no prospect of rescuing the company and are keeping on just a small staff at March to help find new suppliers for its customers.
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Two MBMG trading sites in Holbeach and Bicker in Lincolnshire close this week, with the loss of 84 jobs.
Nick Kidd, of Grant Thornton, the administrators appointed to the company, said they did originally have interested parties for the two Lincolnshire sites "but they have all walked away. These were loss-making businesses and so we have now moved into a wind-down phase."
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Pressure on pricing is blamed by the administrators for the problems at MBMG which will mean those owed money by the company will lose out. One Scottish borders farmer alone says he has �80,000 of supplies unpaid.
Some of those who dealt with MBMG claim poor customer relations were to blame for the downfall whilst others believe it was their expansion in recent years that proved a step too far.
MBMG was acquired by businessman Pepe Bascetta two years ago from Premier Foods but the firm was founded 30 years ago from the coming together of Guy Morton and Sons, Manchett and Till and the Beesons Group. Hillsdown owned it through the 80s and 90s before Premier Foods bought it and then sold it in April 2007 to Mr Bascetta.
The acquisition of F W Gedney and at one time MBMG employed over 500 people but in January this year QV Foods bought its �27 million a year fresh potato division. It left MBMG, trading as MBM Produce, to concentrate on the industrial processes mainly involving peeling operations. MBMG, however, retained the historic liabilities.
"It has come as no surprise to anyone in the industry," one source told Fresh Produce Journal. "The writing has been on the wall for the last 12 months". He blamed loss of key supermarket contracts and management changes for MBMG's ongoing difficulties.
Those now involved in winding down the company believe they had no option given the current economic climate.
"We are, in effect, trying to provide an orderly transition out of the business for existing customers," a source told me.