Demise of sugar beet contractor creates ‘huge challenges’

Financial problems suffered by a major sugar beet contractor and haulier were caused by a decline in the company’s order book, say auditors.

Lincolnshire-based M&J Haulage was expected to harvest an estimated 3,650ha of sugar beet this autumn and winter – including some 1,740ha of sugar beet grown and lifted under a self-grow contract with British Sugar. 

But M&J Haulage had been “impacted by reduced contract volumes leading to a material downturn in profitability” and growing creditor pressure, said auditors KPMG, who were appointed administrators of the company on 12 October.

See also: Emergency called for beet haulage crisis

In terms of the contracted self-grow tonnage – for which M&J Haulage undertakes all field and management operations – the final area agreed with British Sugar for 2017 represented the most beet ever grown by the company for the processing giant in a single season.

Despite this record-breaking area, the amount of beet due to be transported by M&J Haulage was 50% lower than previous seasons. Of this amount, British Sugar had awarded M&J Haulage a contract to haul 40,000t of beet into its Newark factory – less than recent years due to a competitive tender.

In the absence of any committed increase in long-term orders, KPMG deemed M&J Haulage was no longer a viable business. The company’s 24 employees and a number of subcontractors were sent home and on-site operations suspended.

KPMG partner Chris Pole said the feasibility of resuming operations was being assessed while the possible sale of the business and its assets was explored.

Emergency meeting

M&J Haulage’s managing director Mark Popplewell declined to comment on the situation, which emerged as local beet growers prepared to attend an NFU Sugar emergency meeting at Newark showground on Wednesday (18 October).

NFU Sugar chairman Michael Sly said: “M&J’s demise not only creates huge challenges for growers, who may now struggle to find a replacement contractor to harvest and deliver their beet, but also brings into question the effectiveness of the industry harvest and haulage scheme.”

British Sugar said its haulage arrangements were agreed via a competitive tender which M&J Haulage had taken part in for many years. It said it tendered on an annual basis and had explored the option of longer-term contracts but there was not the demand from hauliers.

British Sugar managing director Paul Kenward said the processor had done all it could to support M&J Haulage for the past two years – and had put in place exceptional commercial and financial measures. He added: “Our thoughts are with the employees and their families.”

British Sugar had identified other contractors to ensure beet was lifted and hauled, said Mr Kenward.