Aussie Farmers Direct goes into administration
05 Mar 2018 --- Online food delivery company Aussie Farmers Direct has gone into administration and is set to close immediately after being crushed by the might of Coles and Woolworths. The collapse of the Australian company will leave more than 100 franchises and 260 employees out of work, and approximately 100,000 customers with unfulfilled orders.
Aussie Farmers Direct was a trailblazer in grocery delivery when it started shipping fresh vegetables, meat, bread and dairy to customers’ doors back in 2005.
The decision to go head-to-head with Coles and Woolworths by is understood to have put unsustainable pressure on its finances.
Aussie Farmers charge its customers for goods on purchase, so there is no expectation of a major refund process for the group's customers, according to sources close to the business.
KordaMentha administrator Craig Shepard said Aussie Farmers Direct had unsuccessfully tried to sell the business, and could not recapitalize or find a partner to support its continued trading.
“Unfortunately, it is not possible to continue trading and the business will stop operating immediately,” Shepard says.
A rescue plan for the group is looking unlikely as much of the company's debt is held by investors.
Shepard also noted that Aussie Farmers Direct had struggled to compete with Coles and Woolworths, with directors saying it had been hampered by the major supermarkets' low cost imported products.
Contracts with farmers are expected to be disclaimed and some farmers may become creditors the company if they had forward supply contracts.
Given this stock is perishable, there is a chance the goods will be given to charity. Administrators will work through arrangements for customers and farmers this week.
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