Scandal-hit meat processor Russell Hume has collapsed into administration, with more than 300 jobs set to be lost.
KPMG announced it had been appointed as administrators of the supplier today. Headquartered in Derby, the company employed a total of 302 people at six production sites in Liverpool, Birmingham, London, Boroughbridge, Exeter and Fife.
In a statement, Russell Hume’s directors said enforcement action undertaken by the FSA against the business had “created impossible trading conditions for us, and after careful reflection we have decided the best thing for the company and its creditors is to put Russell Hume into administration”.
They added: “This decision has been heartbreaking. We will continue to work with the FSA with regards to the issues it raised, but we still feel its action has been out of all proportion to the concerns it says it has identified.
“Had it worked more closely with us in the crucial early stages of the situation, then more than 300 jobs may not have been lost. The fact that its investigations have become industry-wide and a number of other firms have also had issues, strongly suggests there is a lack of clarity in the industry and in current FSA guidelines.
“Prior to this, we had a long, unblemished record for supplying quality meat products. We would like to thank our customers for their support, but above all our loyal and hard-working staff, some of whom have been with us a great many years. They were all an integral part of our success, and we are very sorry the Russell Hume story should have ended in such a sudden and devastating way. Our thoughts today are with them and their families.”
Chris Pole, partner at KPMG and joint administrator, added: “The recent product recall and halt in operations has caused significant customer attrition and trading difficulties, which in turn has led the directors to take the decision to place the company into administration.
“Regrettably, with little prospect of production restarting on site, a total of 266 people have been made redundant. Our priority over the coming days will be to work with all affected employees to provide the assistance they need in claiming monies owed from the Redundancy Payments Office.
“We will also be seeking buyers for the business and its assets. Any interested parties are advised to contact us as soon as possible.”
Last week Tim Martin, boss of JD Wetherspoon and formerly one of Russell Hume’s biggest customers, told The Grocer it would be “very difficult” for the pub chain to re-establish any business with Russell Hume once the investigation by the FSA had played out. “The situation is extremely unusual and I can’t recall anything similar in the 38 years I’ve been in business,” Martin said. “Things have gone very wrong for them and I just don’t know whether we could go back. They’d need a completely clean bill of health.”
News of Russell Hume’s administration comes as ITV claimed on Friday the company had sold foreign beef as British.
The report claimed the investigation into the supplier, which had so far been limited to concerns over use-by labelling, was “about to get bigger”, after it cited the evidence of an anonymous whistleblower who claimed Russell Hume had also been falsifying the traceability of imported beef and marketing it as British.
However, the supplier responded by stating it “did not recognise the allegations made in the programme, but in any case we continue to work closely with the FSA in resolving this matter”.
The FSA declined to comment specifically on the claims made in ITV News’ report and reiterated its focus was on use-by labelling.
“Our investigation into Russell Hume is related to a number of issues including concerns about procedures and processes around use-by dates,” the regulator said in a statement. “The Food Standards Agency and Food Standards Scotland took action to stop production at Russell Hume sites last month and affected products have already been withdrawn.
“It is now in the interests of consumers for us to pursue our investigation fully, which could include the possibility of criminal proceedings, and not to jeopardise it by commenting any further on allegations. We have also jointly announced an industry-wide review of meat-cutting premises and cold stores in the UK.”
The Russell Hume scandal first emerged on 24 January, when pub chain JD Wetherspoon pulled all its steaks from sale over labelling concerns and quickly escalated, with the FSA announcing on 25 January that it had launched an investigation and halted production at the supplier’s six factories.