Sunjuice employees face uncertainty as buyer is sought

By Elaine Watson

- Last updated on GMT

Related tags Economics Juice

Administrators at premium juice and smoothies maker Serious Food Limited and subsidiary Sunjuice are hopeful of finding a buyer for the loss-making...

Administrators at premium juice and smoothies maker Serious Food Limited and subsidiary Sunjuice are hopeful of finding a buyer for the loss-making firm.

But speed is crucial amid reports that suppliers are withholding deliveries until they receive payment. Any delay could therefore create major disruption given that Sunjuice supplies more than 50% of the smoothies and freshly squeezed juices consumed in the UK, the majority of which are supermarket own-label products.

The Jamaican-owned firm recently sold its premium desserts business and announced significant job cuts as part of a restructuring exercise designed to bring it back into the black.

However, it has been badly hit by the recent slump in sales of freshly squeezed juices and smoothies. And margins have also been dented by sharp rises in raw materials prices, which it has struggled to pass on thanks to fixed-price contracts with supermarkets.

Chief executive Paul Bates, who was unavailable for comment, had hoped the restructure announced last November would keep the business afloat. He said he had identified “an opportunity to make significant efficiency savings that will include some consolidation of production and the eventual closure of one of our production units”

However, the administrator PriceWaterHouseCoopers (PWC) was called in last week after the firm’s owner Jamaica Producers Group finally pulled the plug on the juice business, which operates four manufacturing plants in Llantrisant, Wales. The plan had been to consolidate production into two of these units.

The chilled soup business (which includes the Simply Organic brand), the Slough-based distribution operation and the Frobishers Juices business were unaffected by the administration, said Rob Lewis, partner at PWC.

He added: “We are already in discussions with a number of parties in relation to the sale of parts of the business which should allow “going concern” solutions to be explored. In the meantime, the business will continue to trade as normal.

“I hope that it will be possible to find buyers for the different parts of the business. We are putting in place arrangements to let trading continue as normally as possible,

While PWC has made 127 out of Sunjuice’s 420 staff redundant, the fact that the remaining staff have not been laid off has been seen by some industry sources as an encouraging sign.

Jamaica Producers Group said Serious Food had experienced “significant operating losses for over two years and has required significant cash support from the JP Group during this time”.

It had also undertaken a series of growth and diversification initiatives that were “unable to achieve competitive market positions”, added group md Jeffrey Hall. “The funding requirements for the combined Serious Food businesses can no longer be justified in the present economic environment in the UK.”

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