Contract loss and funding issues force HEFF into liquidation

HEART of England fine foods (HEFF) has announced it has taken steps to go into voluntary liquidation after 16 years in business.

The jobs of the Shrewsbury-based organisation’s 15 staff will be lost.

HEFF says it has taken the decision partly as a result of losing a major contract with Shropshire Council to manage the Shropshire Food Enterprise Centre, a contract it had held for six years.

The organisation also points to funding from UKTI to support HEFF’s international work not materialising and slow trading across other areas of the business.

HEFF has accused the Government of being “short sighted” in deciding not to fund it and says hundreds of jobs within small businesses are being put at risk as a result.

A statement from HEFF’s board of directors said: “Whilst the move to Shrewsbury College of Arts and Technology in March 2014 provided HEFF with a medium to long-term life line, in the short term the business is not generating sufficient income to replace its lost funding and therefore cannot ensure its future viability.   

“It is important to remember that HEFF was established with government funding to support start-up businesses and SMEs within the food industry.

“Since 1998 HEFF has successfully delivered 17 contracts funded through either central government, the regional development agency, local authorities or the European Regional Development Fund.

“These contracts enabled HEFF to provide much needed support to the sector, which resulted in significant growth within individual businesses and across the food and drink supply chain. It is now apparent that HEFF can no longer continue to support businesses without on-going public sector support.

“Over the course of the last few months the board of directors has worked with the executive team to explore all potential options to enable HEFF to remain open for business but despite valiant efforts we have been unable to secure any additional sources of income from either the public or private sector.”

The statement said that while the company still has healthy reserves, it continues to trade at a loss and the board does not expect it will be able to trade out of its current financial difficulties in the short term. 

“Having taken professional advice, it is clear that to date HEFF has acted in line with its fiduciary duties and in the best interests of the business but to ensure that the company does not enter into wrongful trading the only course of action open to us is to go into voluntary liquidation.,” it said.

“Whilst, over the next quarter, we would have liked to wind the business up ourselves, unfortunately this is not feasible due to cash flow issues.

“We believe the Government is short sighted in not recognising the added value HEFF brings to the food and drink industry and the contribution made to the economy through its activities. 

“The closure of HEFF will have significant repercussions for business across eight of the English counties. Whilst the immediate job losses at HEFF will be 15, the knock on effect is likely to see hundreds of jobs within small businesses put at risk.

“Over the past 16 years it is estimated that HEFF has generated in the region of £90m GVA through its work, created and safeguarded in excess of 2,000 jobs and supported at least 2,800 food and drink manufacturers.”

A meeting for shareholders will be convened by insolvency practitioner Rimes and Co on July 9 at Stone Manor Hotel in Kidderminster.

A meeting for creditors will follow the shareholders’ meeting with the purpose of confirming the appointment of a liquidator.