One of the country's leading fresh produce businesses, MBM Produce, has gone into administration.

MBM, which has traded as MBMG since the merger of MBM Produce and FW Gedney in 2006, called in administrators Grant Thornton last Friday. The company supplies a range of 'middle ground' retail chains, independents and wholesale customers.

Discussions were currently ongoing with interested parties over a possible sale, said Grant Thornton's Ian Carr, and supplies of fresh prepared veg to customers would continue unaffected while a buyer was sought.

The main Holbeach prepared veg plant is continuing to operate. It prepares carrots, onions, swede, potatoes, mushrooms, celery, peppers, courgettes and a number of other veg in various cuts and pack sizes.

However there have been a number of redundancies at the Forfar site, as well as a reduction in HQ staff. MBM employs more than 500 people in the UK and operates overseas through subsidiaries and joint ventures, its website states.

And while no definitive figure is available for MBM's turnover, Carr estimated it to be as much as £100m last year, prior to selling the majority of its potato interests to QV Foods in February 2009. Other sources have claimed it was significantly lower than that.

MBM had found it difficult to maintain profits in the fiercely competitive 'second tier' of retailing, said a senior industry figure. "It's very complex, supplying lots of small lines, and it can heap a lot of pressure on you."

Another source claimed MBM had struggled with outdated facilities and had been losing customers in the past two years. "It's been struggling for a while and this does not come as a surprise," he added.

Some of the company's 'hundreds' of grower suppliers would inevitably struggle to stay in business, the source said.

"It's a tough market out there," added a vegetable industry source. "There's a lot of pressure on prices."