Home delivery group Aussie Farmers Direct closes

DELIVERY business Aussie Farmers Direct has fallen victim to the grocery wars, with 260 employees and 100,000 customers left in the lurch.

FOOD and grocery delivery service Aussie Farmers Direct has shut down, saying it cannot compete in a market dominated by the major supermarkets.

Aussie Farmers, which began 13 years ago delivering milk to peoples’ homes before expanding to a full grocery range, will close immediately after going into voluntary administration on Monday.

Restructuring firm KordaMentha says about 100 franchisees and 260 employees will be hit by the closure.

Administrator Craig Shepard says there is little cash in the company, which has struggled to compete with the supermarket giants in a tough retail environment exacerbated by low wage growth.

He said the company had tried to find a strategic partner or to sell the business but had failed to find a solution to safeguard its future. “Unfortunately, it is not possible to continue trading and the business will stop operating immediately,” Mr Shepard said.

He said the businesses’ logistics services will continue to trade and is not affected by the administration.

The grocery business had positioned itself away from the battle between Coles and Woolworths with a focus on exclusively local produce.

What started as a milk delivery franchise business expanded to include meat and fish, fruit and vegetables, bakery, coffee, deli and organic products.

The company, which appointed KordaMentha as administrator on Monday, had expanded to NSW, Queensland, Western Australia, South Australia and the ACT and was named the fastest growing franchise in Australia by Business Review Weekly.

But Mr Shepard said Aussie Farmers Direct had struggled to compete with the major supermarkets and the promotion of low-cost imported products they sold. He said most of the company’s debt is held by entities associated with local and overseas investors and there is no significant bank debt.

A creditors’ meeting will be called next week.