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Major driedfruit processor experiences cashflow problems
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By Australian Viticulture writer Terry Gange
One of Sunraysia’s driedfruit processors has cut payments to growers because of cashflow problems. Clyne Foods wrote to growers in August advising payments due that month would be halved, along with similar measures likely in September.
Managing director Norm Clyne said the company was trying to manage short-term cashflow problems caused by the discoloration of fruit in storage.
Seven hundred tonnes of golden-coloured fruit destined for export markets darkened more than usual and had become unsuitable for overseas markets, Clyne said.
“That’s meant we will have to put that fruit into the manufacturing market, which is fully-extended in the short-term anyway.
“It’s disappointing and a really hard decision to make but we had to focus on maintaining profitable prices back to the farmer. We would sooner take this little bit of pain now and move forward, rather than put price pressure on the market.”
Clyne said the company had done its best to restructure its financial affairs to avoid a financial imposition on growers.
“Banks are tight on lending because of the global situation and the notice of our action was late because we were still trying to get across the line in that regard,” he said.
“Our losses will be only for the short term, but it’s given us some tight cash-flow issues for July, August and September.
“Moving forward we will make payment in the New Year for the reduction along with an extra 5%.”
Clyne said while growers were disappointed, he was pleased at the response to the decision.
“We’ve had many calls from growers who have been very understanding — it’s been quite an amazing response,” Clyne said.
“They do understand there is a flood of cheap Turkish fruit on the domestic market and that we don’t want to ruin the market for short term gain.
“Our aim is to pay what’s owed later on, along with the 5% bonus.
“It is painful for farmers who are trying to purchase water and manage costs to produce crop the same as we are.
“But we are trying to work together as a chain for the better prices going forward and that has to be our main focus.
“It has been tough going and growers have taken a lot of pain but I think they recognise that Clyne’s have helped get prices up to what I think have been very profitable prices for the last couple of years.
“We’ve always been open and honest and will continue to do that in whatever developments there are.”
Clyne said the company was researching what had caused the fruit to darken more than usual this season.
“I think being such a long drying season on the vines of up to eight weeks probably did not help,” Clyne said.