A new report from industry analyst Plimsoll has argued against those UK fresh produce companies bemoaning the scarcity of bank lending to businesses, noting that many groups in the the market are 'not worth the risk'.
The new 'Plimsoll Industry Analysis - Fresh Produce' report explains that recent failures in other sectors, such as travel and construction, show the danger of operating on 'micro profit margins', with Plimsoll arguing that the same thing could head for the UK's fresh produce industry in 2011.
'Some 566 companies in the market exist on low profit margins of less than 1.5 per cent, with 237 of those making a loss,' the report reads. 'Any bump in the road will be enough to see them fail because they cannot rely on cheap credit to see them through anymore.'
Plimsoll says that, while there are some 'perfectly good' fresh produce companies being turned down and it remains 'essential' that banks should play their part in getting business to move again, they should not be blamed for 'refusing to pay credit to companies that might not be able to pay it back'.
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