A new report has attempted to determine which companies in the UK fresh produce industry are making losses as a result of the economic downturn and which are using the crisis as a smokescreen for existing poor results.
The study, which has been carried out by Plimsoll under the heading 'Industry analysis – Fresh Produce', provides a detailed assessment of 1,000 companies on the UK market, and suggests that around one in four (288 from the businesses featured) groups in the fresh produce industry are making a loss.
'Increasingly, we are seeing companies make a loss for the first time in their history and I think they can rightly claim they are victims of difficult trading conditions,' said David Pattison, the author of the report. 'A quick refocus on profitability would ensure this is an isolated occurrence – 'the year the recession forced us into loss'.'
However, Mr Pattison said in his report that market conditions are proving a convenient excuse for companies that are making a loss for the second or third year running.
'These companies are either blatantly undercutting the rest of the market to enhance or maintain market share or, more likely, have delayed making the painful decision more prudent companies have made recently,' he added. 'No-one wants to trim costs, lay off staff, cancel dividend payments and the like but continuing on regardless is fast becoming unviable. They can't bury their heads in the sand any longer.'
In summarising the report, Mr Pattison praised the management staff at companies where 'difficult and unpopular' decisions had been made, and said that those that had failed to do so were running out of time.
'Without a big increase in demand they cannot support their pricing strategy for much longer,' he said. 'Watch out for a number of failures in the coming months, among the companies we have identified.'
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