Aussie Farmers Direct, a pure-play online grocer with a home delivery network, has gone into voluntary administration after struggling to compete with major supermarkets Woolworths and Coles.
The business will close immediately, affecting about 100 franchisees, 260 employees and 100,000 customers.
In a message on its website, Aussie Farmers Direct said: “We are simply no longer able to compete against the domination of the major two supermarkets and the influx of cheap imported produce.”
One part of the business, Home Delivery Services, a logistics service that provides last-mile delivery services, is unaffected by the voluntary administration and will continue to trade.
Craig Shepard and Leanne Chesser of KordaMentha Restructuring were today appointed administrators.
Shepard says Aussie Farmers Direct tried but failed in attempts to recapitalise, find a strategic partner or sell the business.
“Unfortunately, it is not possible to continue trading and the business will stop operating immediately,” he says.
Aussie Farmers Direct began 13 years ago as a home delivery service for fresh milk, cheese, bread, and juice in Victoria.
It expanded to NSW, Queensland, Western Australia, South Australia and the ACT. By 2010, it had been named by Business Review Weekly as the fastest-growing franchise in Australia.
Two years ago, it challenged the supermarkets by offering thousands of grocery items.
Shepard says the company struggled to compete with the big supermarkets in a tough retail environment exacerbated by low wage growth.
“Directors believed their ability to sell local products was hampered by the promotion of low-cost imported products sold by their opposition,” he says.
Shepard says there was little cash in the company. Most of the company’s debt was held by entities associated with local and overseas investors.
Most of the Aussie Farmers Direct website is closed, but the staff managed to leave a message on one page.
“From the team at Aussie Farmers Direct, thank you for your support, we love you all, and we are so sorry to be going away,” the message reads.
“Eat well, love your family, look after your friends. Remember that dreams are fragile, and we all need each other.
“We are sad to announce that Aussie Farmers Direct is closing its operations today.
“After 13 years of working with many of Australia’s great farmers and delivering their fresh produce to Australian families, it is hugely disappointing that is has come to this.
“Aussie Farmers Direct started as one small milk run delivering 100 bottles a week. Over the years we grew to be a full-service grocer to thousands of customers across Australia.
“We have worked with hundreds of farmers and local suppliers over the years, and we are proud to have played our part in getting farmers and Australian households a fair deal.”
Any customers scheduled for a delivery on this afternoon will have their order refunded.
A meeting of creditors will be called next week.