Asda is facing a curry shortage after the supplier of its own-label Asian ready meals went into administration with the loss of 300 jobs, reports The Guardian.
S&A Foods, based in Derby, stopped delivering to Asda a few days ago before appointing administrators. The company’s founder, Perween Warsi, told the trade journal Food Manufacture that she had no alternative when the supermarket opted to use another supplier after a 28-year relationship.
Asda said it gave S&A Foods a year’s notice of its intentions after a tender process and had been expecting deliveries to continue until October 2016.
It is understood that the supermarket offered to help to support the food producer financially for a short period so that it could continue operating and seek other clients.
Asda said it was in negotiations with alternative suppliers and would have more curries on its shelves on Wednesday, but that these would not carry an Asda label.
A spokesperson said: “We’re saddened to hear that S&A Foods has entered into administration. We had committed to supporting the business over the next 12 months, but as a result of financial difficulties unrelated to S&A’s relationship with Asda, we have been informed that production will cease with immediate effect.”
Unite said the closure of the company was a “body blow for the employees, their families and the local Derby economy”. The trade union said the company was particularly important to the largely Asian community in the Derby suburb of Normanton, where it was based.
The collapse of S&A comes as supermarket suppliers face increasing price-war pressure as leading grocers try to take on fast-growing discounters such as Aldi and Lidl.
Asda first began selling Warsi’s products, which included Indian, Chinese and Mexican ready meals, when she was still running the business from her kitchen.
Matt Cowlishaw, one of the joint administrators from Deloitte appointed to S&A Foods, said the company had struggled with cashflow following the traditionally quiet summer trading period.
He said: “S&A Foods has been facing financial difficulties for some time and a sale process was started 12 months ago. The management has been working hard exploring options to secure the future of the business, but was ultimately unsuccessful.”
The administrators are looking for a buyer for the company’s production facility. But Cowlishaw said they had no option but to make the majority of the staff redundant after S&A’s main client ended its contract.
