The receivers and management of Yarrows (The Bakers) Limited are staying tight-lipped about the problems that led to one of New Zealand's last remaining independent bread bakers going into receivership.
But a food industry source says the business's location in the small Taranaki town of Manaia - about 300km from
its main market in Wellington - proved problematic for the firm.
"The facility was stuck out in the middle of nowhere," said the source, who declined to be named, adding that the location could make the receivers' task of selling the company difficult.
The source said rising raw ingredient costs, especially wheat, coupled with tough economic conditions might have contributed to its woes.
But South Taranaki mayor Ross Dunlop was confident buyers would be found for the company, which employed around a fifth of the population of Manaia.
"We're all pretty optimistic that they're going to keep trading, and hopefully a buyer will come along to take it over as a going concern," Dunlop told Radio NZ yesterday.
Receiver Brian Mayo-Smith, of chartered accountants and advisers BDO, said that as Yarrows was a privately owned company it would be unethical to make specific comment on the issues that led to the receivership.
"To be quite honest we really have to concentrate on running the receivership," he said. "I doubt we'll ever be making a comment on what led to this."
A company representative also declined to make any comment to the Business Herald.
The receivers said other companies in the Yarrows Group operating in Rotorua and Australia were unaffected and continuing to trade as normal.
Founded in 1923 by Alfred and Grace Yarrow, the company tried to revive its fortunes in 2008 by introducing a new range of breads made with a South American wholegrain chia, which it branded as Salba.
It made the move - licensing the ingredient and branding from Canada - after losing a contract comprising 70 per cent of its production of fresh bread, which it used to supply to Tip Top.
- Additional reporting NZPA
