Enterprise Foods Ltd, a UK wholesaler that supplied food to major retailers including Morrisons and Co-op, has collapsed into liquidation with debts of more than £5 million, resulting in 71 job losses. The company, originally formed in the mid-1990s as Food From Scotland Ltd, focused on delivering wholesale products to small independent Scottish retailers before expanding across the UK.
Company history and rebranding
In the early 2000s, the business rebranded as Enterprise Foods Ltd in 2001 as it broadened its reach. It later changed its name to the Localist - The Food Merchant last year, but within less than a year, the company collapsed into liquidation.
George Lafferty of financial and real estate advisory firm BTG was appointed as liquidator, tasked with settling the company's outstanding debts and winding up its affairs.
Failed restructuring efforts
Despite efforts by company bosses to turn the business around and avoid redundancies, the restructuring attempts proved unsuccessful. In a statement released in March, Thomas McKay, managing partner of BTG in Scotland and Northern Ireland, said the job losses were "sadly inevitable." He added, "There are many small suppliers to the business that are owed money, and the loss of this route to market will also have a serious knock-on effect on these food producers as well."
McKay noted that BTG was "working to assess all claims and establish whether there will be any dividend paid to unsecured creditors, but it is not likely to be significant, given the level of secured debts in the business." He also said they were "working closely with those affected to help them access the financial entitlements and support available to them, including assistance from Partnership Action for Continuing Employment (PACE) and the Redundancy Payments Service."
Impact on retailers and supply chains
Both Morrisons and Co-op told Convenience Store that they did not expect Enterprise Foods' collapse to disrupt their supply chains. Morrisons only collaborated with the firm for a limited range of products and said it was in talks with suppliers to continue the partnership "on a direct-to-store basis."
Co-op had received supplies through Localist, but only for certain local food lines. In March, following Enterprise Foods' collapse, Co-op began sending purchase orders directly to suppliers to avoid stock shortages. This was described as an interim arrangement while evaluating longer-term agreements.
A spokesperson for Co-op said: "As a community retailer Co-op takes great pride in offering local products in our stores and in backing Britain's producers. Following the unexpected news of Enterprise Food Ltd (EF) entering liquidation in March, as one of EF's customers, Co-op believed it was right to act quickly and provide support and reassurance to the local, often smaller-scale, businesses affected. At the time, we put in place emergency, interim supply arrangements to secure supply and payments and we are delighted that we have now reached agreements for almost all of the individual small suppliers to continue to supply Co-op directly."
