Aussie Farmers Direct has gone into voluntary administration. The food delivery company blamed competition with major supermarkets and the influx of cheap imported produce for its demise.
The 13-year-old business will close immediately, affecting about 100 franchisees, 260 employees and 100,000 customers around the country. No future orders will be delivered and refunds will be issued, the company said.
KordaMentha has been appointed voluntary administrators and said Aussie Farmers Direct had made attempts to recapitalise, find strategic partners, or sell the business. All of which failed to safeguard the company’s future, according to Craig Shepard of KordaMentha restructuring.
“Unfortunately, it is not possible to continue trading and the business will stop operating immediately,” Shepard said. The tough competition with supermarket giants was exacerbated by low wage growth, according to Shepard.
Aussie Farmers Direct directors said the promotion of low-cost imported products sold by their opposition hampered their ability to sell local products.
The online grocery game is close to a duopoly in Australia with Coles-owner Wesfarmers and Woolworths accounting for almost 77 per cent of the market, according to IbisWorld. Both companies made over $1 billion from online sales last year.
Aussie Farmers Direct was founded in 2005 as a home delivery service for fresh milk, cheese, bread, and juice in Victoria. It grew quickly, expanding across Australia and two years ago challenged major supermarkets by offering free delivery of groceries.
In a message on its website, Aussie Farmers Direct said it was “hugely disappointing” that they could no longer compete against the two dominant supermarket chains and cheaper imported food.
“Over the years we grew to be a full-service grocer to thousands of customers across Australia. We have worked with hundreds of farmers and local suppliers over the years, and we are proud to have played our part in getting farmers and Australian households a fair deal.”
“With the support of our customers, we took a stand on many industry issues including fair milk prices, free range eggs and supporting farming communities through the tough times including droughts, floods and financial hardship.”
A meeting of creditors will be called next week.