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Widnes-based Food Businesses Entered into Administration

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Reviewed: 28th September 2016

A pair of food industry operators based in the Cheshire town of Widnes have been entered into administration after struggling to stay in business in the face of mounting financial pressures.

Key Food Ingredients and its sister operation Simplea Foods are both part of the Key Foods Group, which had employed a total of 44 people.

Administrators have said that 39 members of the two businesses’ workforce will be retained for the moment as decisions are taken on what the future holds for their employers.

Key Food Ingredients built its business primarily around importing cream and butter products with a view to selling them on to other companies within the foodservice, cocoa and manufacturing industries in the UK.

However, shifts in the prices of bulk cream and butter products in recent months have taken their toll on the business and made it much more difficult for it to continue operating and making profits, its appointed administrators have explained.

“Whilst historically a successful business, more recently the financial performance of Key Foods has been impacted by the volatile commodity prices of bulk cream and butter,” said Paul Dumbell, one of Key Food Ingredients’ recently appointed administrators.

“In particular, the company was hit by a sharp increase in the market price of cream between April and July 2016, ultimately resulting in this administration appointment,” he said.

For its part, Simplea Foods operates as an importer of raw ingredients that are subsequently involved in the production of ready-to-use puree food products such as garlic, ginger and chilli as sold by supermarkets and other retailers.

In addition to both Key Food Ingredients and Simplea Foods, the administration process also affects the warehousing and distribution arm of the Key Foods Group, which has been trading separately as Key Distribution.

“In addition to securing the assets of the business and streamlining operations in an attempt to continue to trade, the joint administrators are now exploring a sale of this unique local business and its assets,” Paul Dumbell from KPMG said in a statement.

According to figures compiled earlier this year by the accountancy firm Moore Stephens, annual rates of insolvency among food companies in the UK have increased threefold since 2010. We have an extensive network of 75 offices offering confidential director support across the UK.

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