Leading Russian importer JFC Group has filed for bankruptcy with a regional commercial court, according to reports in the country today (22 February).
According to Russian news channel RT, the St Petersburg-based group has claimed that global market instability, specifically the impact of the so-called 'Arab Spring' on the Southern Mediterranean market, has undermined its business.
A JFC statement seen by RT suggested that the loss of business in the Southern Mediterranean region left the group with large volumes of unsold fruit which it subsequently took to Russia, resulting in considerably lower banana prices in the country.
'JFC Group operated about 30 per cent of its sales in the South Mediterranean; the company bore losses due to the rupture of business contacts, loss of markets and charge-off,' the JFC statement read.
However, the group insisted that it still had the resources to continue importing from Latin America where contracts are in place, with no reported disruptions to supply in Russian grocery retailers.
Despite the problems, experts told RT that reports of the group's failings had been 'exaggerated', with JFC 'merely filing for bankruptcy to avoid legal proceedings and payments in these hard times' – particularly given the recent case involving Star Reefers, where the shipping group sued JFC for cancellation of contract.
In August, JFC announced a drop in net profit of 85 per cent for the first half of 2011, compared with the same period of 2010. Net profit reportedly fell to Rbs45.5m (€1.1m), while revenue tumbled by 10.7 per cent to Rbs5.61bn.
