Aussie Farmers Direct in Administration

Craig Shepard and Leanne Chesser of KordaMentha Restructuring were today appointed Voluntary Administrators of Aussie Farmers Direct, the national food and groceries home delivery network.

The business will close immediately, affecting about 100 franchisees, 260 employees and 100,000 customers around the country.

Mr Shepard said one part of the business, Home Delivery Services (HDS) would continue to trade and is not affected by the Administration. HDS is a logistics service that provides last-mile delivery services.

Mr Shepard said Aussie Farmers Direct had made attempts to recapitalise the business, find a strategic partner or sell the business. But these attempts had failed to find a solution to safeguard the company’s future.

“Unfortunately, it is not possible to continue trading and the business will stop operating immediately,” Mr Shepard said.

Aussie Farmers Direct began 13 years ago as a home delivery service for fresh milk, cheese, bread, and juice in Victoria. Over the next five years it expanded to NSW, Queensland, Western Australia, South Australia and the ACT. By 2010, it had been named by Business Review Weekly as the fastest-growing franchise in Australia. Then it introduced organics to its range of local produce. Two years ago, it challenged the supermarkets by offering thousands of grocery items.

Mr Shepard said the company struggled to compete with the big supermarkets in a tough retail environment exacerbated by low wage growth. Directors believed their ability to sell local products was hampered by the promotion of low-cost imported products sold by their opposition.

Mr Shepard said there was little cash in the company. Most of the company’s debt was held by entities associated with local and overseas investors. There was no significant bank debt. A meeting of creditors will be called next week.