One of Australia’s favourite family-run food businesses has closed up. Spring Gully Foods, a South Australian company that took up room in kitchen pantries around the country for 80 years, was placed into administration this week with $3.8 million of debt. This latest news from Australia has left 34 employees out of work and around 1000 creditors asking themselves whether they’ll ever get a cent back.
The fourth-generation family business struggled hard to keep afloat but was unable to bounce back from losing several large contracts recently. Administrator James McPherson cited the reason that the company experienced operating losses it couldn’t overcome. The family that owns Spring Gully, who declined to comment on camera, stated this is an “extremely difficult time” and “the end of an era” for them.
Second Time Facing Collapse
This isn’t the first time Spring Gully has faced disaster. The business went into administration in 2013 as well. Then, customers stood by the brand and there was a rescue prompted by public support. This time, however, it looks like a different story. McPherson indicated he doesn’t think all creditors are likely to be repaid in full, and a repeat rescue is unlikely.
The issue boils down to competition. Foreign businesses can produce the same items and sell them at a lower price than Australian producers. Spring Gully just could not compete with those reduced prices while keeping its business in South Australia. Assets owned by the company will be liquidated to repay as much debt as they can.
Brand Might Survive
There’s a slim possibility Spring Gully products may make an appearance on supermarket shelves again someday. McPherson explained that another company may purchase the intellectual property of the brand, meaning the Spring Gully name and recipes. If that’s the case, Australians may still notice those recognisable jars and bottles on the shelves, even though the original family business has disappeared.
For the moment, the factory closed down altogether. Staff received the news that they were no longer employed, and the company that set the South Australian food culture for a generation has closed up shop. Whether the Spring Gully products return under new management is anyone’s guess, but the original family business has closed its final page.
News At Glance
- Spring Gully Foods shut down with $3.8 million in debt and 34 employees lost their jobs
- The company was unable to recover after losing key contracts and running at an operating loss
- This is the second government in 12 years after being rescued in 2013
- Cheaper goods from international rivals made survival possible
- Another business could purchase the brand name so goods would come back
FAQs
- For how long has Spring Gully Foods been operating?
Spring Gully Foods was a family-run South Australian food factory that operated for 80 years before it closed this week.
- How much is the company in debt?
The company owes $3.8 million to about 1000 creditors who probably won’t be repaid in full.
- Why did Spring Gully Foods close?
The firm lost several big contracts and couldn’t compete with cheaper overseas products, resulting in operating losses it couldn’t get over.
- Will Spring Gully products be around?
Perhaps – a new company could buy the intellectual property of the brand and produce Spring Gully products under new management.
- What became of Spring Gully staff?
All 34 staff members were made redundant when the firm stopped trading and went into administration this week.
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