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The Aldi salad supplier has appointed administrators with The Grocer understanding that unsecured creditors will be owed as much as £10m

Aldi salad supplier UK Salads Limited has appointed FRP as administrators. 

The Grocer understands the major Essex-based supplier, which grows a range of fresh produce for retailers including Aldi, has unsecured creditors totalling more than £10m.

According to industry sources, the company has nearly £15m worth of “perfectly good greenhouse crop”, including tomatoes, cucumbers and aubergines, in the company’s 60 acres of greenhouses waiting for harvest.

Alastair Massey and Glyn Mummery, partners at FRP, were appointed as joint administrators on 28 February.

”UK Salads was a well-established growing, packing and importing company supplying to major retailers, wholesalers, catering and the public,” said an FRP statement. “Unfortunately, following a period of challenging trading conditions, the business was unable to meet its financial obligations as they fell due, entered into administration and ceased to trade.” 

This has resulted in around 200 redundancies and the joint administrators will support those in making claims to the Redundancy Payments Service. 

“The Joint Administrators are now considering all options for the business and exploring interest from a number of parties,” it added. 

One source, whose company had stopped “supplying [UK Salads] about a month ago when our credit insurer pulled all cover” said the administrator would now have to decide “quickly” regarding what to do with the harvest.

“The problem is, the crop in the greenhouse won’t wait too long for a decision from the administrators,” they said.

“We are very sorry to hear this news and our thoughts are with all those affected,” said an Aldi spokesperson. “UK Salads has been a long-term partner to Aldi, and over the past few months we have been working to support them and maintain availability across our stores.”

UK Salads had been a family business, established in 1992, before it was bought out by private investors in 2019 under the name of Aquila Food Group Holding Company.

In an email seen by The Grocer from one of the investors at the time of the takeover, he said it was their “intention to grow UK Salads Ltd both organically and through bolt-on acquisitions allowing for us to capture a larger portion of the market share domestically and internationally”.

However, The Grocer understands the company had faced “all sorts of issues” in the past five years, including soaring energy costs, an issue that has plagued greenhouse-based companies for more than two years.

A source added Aldi would need to decide if it would look on the open market and move the volume purchased from the company elsewhere, or wait.

They said “there’s simply not that sort of volume available here in UK” to replace the UK Salads crop should the administrators decide not to harvest, so the retailer would likely have to look abroad in places such as the Netherlands.

An Aldi spokesperson told The Grocer it was “working with UK Salads, our global sourcing team and other supply partners to ensure that no crops go to waste”. 

“We’d like to reassure our customers that they will still be able to buy everything they need at Aldi.”

An additional problem, another source explained, was that workers would leave once the business was in administration, applying further pressure around the need to harvest the crop.

UK Salads is the latest in a number of fresh produce companies that have been forced to cease operations in the past few months due to challenging operating conditions.

Major apple grower Bardsley announced plans to do an “orderly wind down” of production in January, following several years of significant losses. Perthshire-based grower Leadketty Farm ceased berry production last month, citing a lack of support from the supermarkets and rising costs.

UK Salads was approached for comment.