Fears for survival of Bernard Matthews' creditors after pre-pack deal
PUBLISHED: 10:33 22 September 2016 | UPDATED: 10:33 22 September 2016
Smaller creditors could be left battling to survive because of the domino effect of the deal the save Bernard Matthews, industry experts have warned.
Union meets management
The union Unite has welcomed reassurances from Bernard Matthews’ new owners over the jobs of its 2,000-strong workforce.
They met representatives of the Boparan Private Office at the turkey producer’s Great Witchingham headquarters yesterday.
Unite regional officer Steve Harley said: “We had productive talks and we were given guarantees that all current agreements will be honoured.
“It was made clear that the new owner wishes to restore Bernard Matthews to its former position as a highly profitable business that it enjoyed before the current financially troubled period.
“This would be achieved by greater investment in the business, cost savings, and utilising the present spare capacity at Bernard Matthews to process chicken and not just turkeys.
“We are reassured by the pledge that there will be no reduction in the workforce headcount and that the company is looking forward to a full order book for this Christmas.
“Going forward, we wish to work with the new management team to achieve the goal of an expanding enterprise and maintaining Bernard Matthews as a major employer in East Anglia.”
Unite represents about 800 of the 2,000-strong workforce at the producing sites at Great Witchingham and Holton in Suffolk, as well as the animal food mill at Bawsey, near King’s Lynn.
They fear the pre-pack administration – which transfers a company’s assets but not its debts – which saw the company taken over by entrepreneur Ranjit Singh Boparan could ultimately leave “hundreds” of suppliers out of pocket.
Administrators Deloitte are understood to be writing to known creditors this week, though a full list of the company’s creditors is not yet available.
Clarke Willis, group chief executive of Anglia Farmers, said he feared the impact of the Bernard Matthews deal would be business failures across both Norfolk and Suffolk.
“There will be hundreds and hundreds of local businesses owed money, and the sad thing is that an awful lot of them will not be able to survive it,” he said. “I think the fallout is going to be fairly massive.”
Mr Willis said Anglia Farmers was owed around £9,000 but he knew of suppliers who were owed “hundreds of thousands of pounds”.
“Businesses like that have got a lot of smaller suppliers that rely on them. There will be a raft of smaller individual businesses doing plumbing, electrics, van repairs and so on. £10,000 to some of them will be major.”
Bernard Matthews was acquired by the Boparan Private Office, an investment firm owned by Ranjit Boparan, the owner of the 2 Sisters Food Group, in a pre-pack administration, meaning Bernard Matthews’ assets have transferred but not its debts.
The turkey producer, Europe’s largest, employs more than 2,000 people at sites across Norfolk and Suffolk.
The National Farmers’ Union has also raised concerns at the deal and is offering advice to affected members.
Chief poultry adviser Gary Ford said: “Given that part of the business involves the ongoing rearing of turkeys, we recognise that a quick sale of the business was expedient. However, we also recognise that as a result of this arrangement, a number of suppliers – some of which will be NFU members – will have lost out financially.”
Administrators have eight weeks to issue proposals to creditors, though in a pre-pack administration the process is usually faster, said insolvency specialist Andrew McTear.
He had previously warned of a “domino effect” for creditors, and warned suppliers should prepare themselves for the worst.
“Trade creditors will have seen their cashflow hit. It’s unlikely they will receive any payments in the next two or three months, which is the normal time frame they would expect,” said Mr McTear, a partner at McTear, Williams and Wood in Norwich.
“They need to assume they are not going to receive any payments in that timeframe and manage their business accordingly.”
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