'The fresh produce industry has benefited a little historically from not needing debt,' Plimsoll's senior analyst David Pattison told the Journal. 'But increasingly the cost of technology and entry is higher. If we're financing losses, that's a completely different scenario to financing interest.' Plimsoll found only 94 fresh produce companies not carrying debt, while the average company is financing around 30 per cent of its assets. Based on an average margin of 1.6 per cent, the report said that paying back this debt was an unlikely scenario – especially given that 24 per cent of the industry is making a loss.

Despite this, Pattison is trying to remain positive on the industry's future. He said: 'This is an ambitious market, but we are still faced with the problem of too many companies chasing too little business. However, the demise of Albert Fisher last year helped everyone. That there was a little implosion like that in the industry freed up some business.' Nevertheless, Plimsoll found 87 companies where debt had risen to such a high level that even normal trading had become hazardous.

'These companies are struggling,' admitted Pattison. 'Their debts have increased nearly 66 per cent in the last three years and their ability to pay these debts back is under great threat.' These companies, he added, are using debt as a permanent method of financing their company. All have carried debt to some degree for the past four years, and further analysis of these 87 companies revealed some unnerving statistics.

Plimsoll discovered that 57 of these companies were loss making, while 46 had failed to increase sales. Also, interest payments to the banks were eating into almost one per cent of sales for all 87 companies.

'One thing that gets lost is that while the banks are great for supporting businesses, no one tells you how much money they get out of all this,' Pattison stressed. 'The banks will continue to lend companies money, but also to make money out of these companies. That means funds are not being re-invested into the industry to help further a company's growth, instead they are going towards paying interest rates.' One way out for these 87 companies, placed in 'danger' by Plimsoll's own financial rating system, could come through a buy-out from a stronger predator exploiting adversity. Some 17 of these are named in the analysis as 'acquisition prospects – good companies smothered by debt'.

'The analysis reveals those that are already heavily in debt, and will serve as an early warning to those that are considering dancing with the devil,' said Pattison.

Considering what companies can do to strengthen their position, he added that reducing monies owed is always difficult. 'The effect could be,' speculated Pattison, 'that some smaller businesses may have to retract for a while to lick their wounds before they come back. But there's nothing wrong with taking a step backwards in order to return stronger.'