Salad supplier Southern Salads entered administration and “all but a handful” of its 260 workers lost their jobs, after the value of sterling plummeted following the Brexit vote.
Southern Salads had been under pressure since the result of last year’s EU referendum, as it relied on imports from a number of European countries, administrators said.
Joint administrator, from FRP Advisory, Ian Vickers said: “Despite successfully producing over 50t of salad a day for its array of customers, the company faced an unprecedented pressure on cash flow in the immediate aftermath of last summer’s EU referendum vote.
“The sudden decline in sterling was not foreseen by the company, leaving the business grappling with an immediate fall of between 10% and 20% in its purchasing power for overseas-grown salads required for the winter and early spring UK market, which in turn, put a severe strain on cash-flow.”
Southern Salads held unsuccessful talks to increase its prices to supermarkets, in a bid to pass on some of its cost increases. It also failed in talks to reduce its costs paid to its European suppliers, which were based in the Netherlands, Poland, France, Italy and Spain.