Salad company blames Brexit as 260 jobs lost in ‘blow’ to local economy

Salad company blames Brexit as 260 jobs lost in 'blow' to local economy

THE swift drop in the pound’s value after last year’s Brexit referendum has led to the loss of hundreds of jobs in Tonbridge, according to the town’s MP.

Southern Salads, who have been based in Canon Lane since 1996, went into administration last week laying off all but a handful of their 260 staff.

The 31-year-old family-run business supplied more than 50 tonnes of fresh salad a day to supermarkets, restaurants and travel chains all over the country but were heavily reliant on importing vegetables from Holland, Poland, France and Spain.

As such they ‘faced an unprecedented pressure on cash flow in the immediate aftermath of last summer’s EU referendum vote’, according to administrator Ian Vickers.

He continued: “The sudden decline in sterling was not foreseen by the company, leaving the business grappling with an immediate fall of between 10 per cent and 20 per cent in its purchasing power for overseas-grown salads required for the winter and early spring UK market which in turn put a severe strain on cash-flow.

“With insufficient protection from its currency hedging arrangements, pressure increased on cash-flow as the business traded through to this spring.

“The company was unsuccessful in negotiating any significant changes to its pricing terms with its suppliers in mainland Europe, while also being unable to pass on its cost increases to supermarkets and its other customers.”

[quote_center]’Saying it is related to Brexit is just a statement of fact, it doesn’t mean Brexit is good nor bad'[/quote_center]

Reacting to the news, MP Tom Tugendhat said: “This is a sad time for all employees who have lost their jobs, as well as friends and families. The closure happened very suddenly and will be a blow to Tonbridge.

“I campaigned very actively for Remain because this is exactly what I expected, and I’m very sorry that it has happened.

“This is an important Tonbridge employer that was bringing money into Tonbridge and supporting many Tonbridge community events, so I’m very sorry to see it go,” he said.

He later told the Times: “This is clearly a warning to all businesses who rely on trade with EU countries that times are changing and it’s important to retain flexibility. I am determined that our economy continues to grow and we are seeing many businesses choose to invest here.”

The connection to Brexit was criticised by South East independent MEP Janice Atkinson, who tweeted: “Perhaps this Kent firm was overtrading, salads not great, run badly?

“They played with currencies and didn’t hedge their dealings. Any bank offers this facility.” The Times asked Ms Atkinson for further explanation but she declined.

But Mr Tugendhat found this type of view perplexing: “I find it odd when Leave campaigners, who voted for a major consequential change, are surprised when there are consequences.

“Saying it is related to Brexit is just a statement of fact, it doesn’t mean Brexit is good nor bad.

“Certain changes hurt importers and help exporters, that’s just a fact of life. Some companies are doing very well out of Brexit. The economy is going really well.

“There are many legitimate reasons to vote Leave but don’t be surprised when companies that didn’t hedge their bets go under and cost jobs. We are lucky in West Kent that we have a dynamic economy that means a number of alternativeemployers have already come forward. So it is unfortunate, but not a disaster.”

It is unclear what impact this will have on the surrounding economy. LJ Betts, a 700-acre leaf farm in West Malling, were one of their largest suppliers and will undoubtedly take a significant hit from the closure. Southern Salads’ website stated that the pair had ‘a long standing relationship and the two businesses have grown with each other’. Managing Director Stephen Betts declined to comment on the impact to his business.

Mr Tugendhat has set up a guide for those made redundant including information on how to apply for redundancy payments and a list of local businesses with employment opportunities.  

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