A SPECIALIST food and drink wholesaler which worked with a host of Scotland’s best-known brands has closed down after falling into administration, leading to 21 redundancies and fears small producers will be left out of pocket.
Twenty-one employees have been made redundant at Cumbernauld-based Food and Drink Hub (Scotland), which helped brands such as Edinburgh Gin, Pickering’s Gin, Innis & Gunn, West Brewery, Fyne Ales, Ramsay of Scotland, Bells and Malcolm Allan gain listings in major supermarkets and catering companies.
Joint administrators Paul Dounis and Gareth Harris of RSM Restructuring Advisory were appointed following a review of the business, which resulted in its immediate closure and redundancies. Efforts to secure investment were not successful.
It is understood that the firm collapsed while owing a number of Scottish food and drinks producers “five-figure sums”.
The administrators said last night that they have written to all creditors of the company inviting claims to be submitted.
Food and Drink Hub (Scotland) was what is known in the industry as a “consolidator”. These companies bundle mixed pallets of goods from small producers and sell them to supermarkets, which often prefer not to buy directly from smaller concerns for reasons of scale.
One supplier told The Herald it was unfair that companies such as his will lose out despite being encouraged by supermarkets to use consolidators like Food and Drink Hub (Scotland).
He called for grocers to carry out more due diligence on consolidators in order to ensure small producers are protected.
The supplier said: “If supermarkets are going to use consolidators they have to take some moral responsibility ... to make sure they are financially sound.”
Mr Dounis said: “This year has been an extremely challenging time for many sectors as a result of Covid-19, including food and drink.
“The financial instability caused, together with lockdown restrictions, directly impacted on the profitability of the business resulting in the directors taking the very difficult decision to place the company into administration.
“The directors worked closely with RSM in the immediate period leading up to administration and despite their best efforts a rescue of the company was not possible.”
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