Food distribution business placed into receivership as industry cracks under supply pressure

Yet another major food distribution business has collapsed into administration with industry experts complaining the sector is continuing to suffer under some of the worst conditions in decades.

The collapse of Downton & Dyer comes after wholesale food distributor Victoria Foods Group collapsed into receivership in June, while one of the country’s largest food and vegetable growers, Barbera Farms, was also placed into the hands of receivers Ernst & Young earlier this year. Ethnic food group Parsam Group went into administration earlier this month.

Downton & Dyer, which on its website claims to be 120 years old, along with A & D Food Services, Venasti and Tatale, have been put up for sale by administrators Christopher Darin and Nicholas Melanos. SmartCompany has attempted to contact Worrells, but no reply was available prior to publication.

SmartCompany also contacted Downton & Dyer, but phone lines appear to be disconnected. It is unknown whether all the assets are integrated and associated with Downton & Dyer.

Domenic Greco, executive director of the Convenience and Mixed Business Association, says the industry is suffering under some of the worst conditions he’s seen since the 1980s.

“I’ve watched everything happen from a distance, and from being in the middle of it, it’s gotten worse in the past five years,” he says.

“There’s going to be some major changes soon. Many suppliers can’t sell because of competition from Coles and Woolworths, and if that market is being taken they have very limited areas where they can turn to.”

Greco says part of the problem is that Coles and Woolworths are expanding through convenience stores and other areas, and says that many smaller retailers are beginning to source their food products through Coles and Woolworths because they can get major discounts.

“They are literally at the mercy of Woolworths and Coles and… that’s nothing against them, I’ve worked for both of them, but they are taking over petrol, convenience and liquor, and controlling all of the supply lines.”

Greco warns that if conditions don’t improve, there could be more closures within the next few years. “There’s going to be some major changes,” he warns.

The advertisement for Downton & Dyer describes the company as one of the country’s leading food distributors, and offers at least 7,000 metres squared of floor space, multiple loading docks, a fleet of vehicles, a “major” client base and “huge” custom walk-in freezers.