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Avalon administrators blame fruit and veg for cash flow issues
BDO Stoy Hayward, the administrator of Avalon Packaging, has blamed seasonality of the fruit and vegetable market for creating "cash flow pressure".
According to a report from Crain's Manchester Business, BDO Stoy Hayward has published a statement about the company's business affairs.
Crain's reported that the statement said that Avalon, which went into administration in October, will end up owing almost £3m to creditors who have lodged claims of £6m.
It has also revealed that the company attempted to enter the meat market, but suffered when a supermarket returned goods claiming they were not fit for purpose.
An investigation discovered that regulatory tests were not carried out on the some of the raw materials and a court case is pending.
The administrator was this morning unavailable to comment further.
Avalon Packaging has been established for more than 25 years, has 11 thermoforming lines and its own fleet of distribution vehicles. It had a turnover of more than £16m in 2007.
In April 2007 the company was fined £50,000 after pleading guilty to 15 offences under the Producer Responsibility Obligations (Packaging Waste) Regulations 1997.
Avalon: creditors have lodged claims of £6m
Comments
Timothy Rothwell - 05 January 2009
The BDO explanation for Avalon`s demise is simply not convincing.Many plastic thermoformers are exposed to the produce market and have not suffered in the same way.It is also worth emphasising that the company were not newcomers to the meat tray market and had been forced to withdraw before.
Avalon was a victim of lowly pricing,a questioable strategy and even more questionable management and controls.
There will be several other failures in the sector for companies with similar shortcomings.
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