Grower frustration at lack of answers on Wellgrain
© Design Pics Inc/REX/Shutterstock Frustration is growing as the administration of Cambridgeshire merchant Wellgrain continues to produce more questions than answers.
Access to stored grain is a big issue – several growers with grain stored in Wellgrain stores can get neither access to their grain (which in some cases is committed to other merchants), nor any detail about how much grain is in store and whether this figure matches what should be there.
Determining the tonnage in store, under what type of contract and allocating grain ownership between the company and growers are key tasks for the administrator.
Growers who simply had their grain stored on contract will need to show this was the case.
See also: Wellgrain collapse – live updates
The severity and sensitivity of the situation means that even many of those not directly affected are reluctant to speak openly about it.
However, Farmers Weekly is hearing daily from more growers caught up in the administration, and from merchants and processors who have bought grain from growers whose crops are stored with Wellgrain.
In turn, these buyers have sold the grain on elsewhere.
In some cases, the ex-farm buyers can call for the grain in March, but are giving the growers involved more time in the hope that they will eventually get access to their grain or to its value.
Third-party storekeepers are also affected, left with grain of uncertain ownership among different parties, and in turn owed money by Wellgrain and unable to look for new storage customers until the issue is resolved.
The storekeepers are often holding grain belonging to local growers whom they know well but to whom they cannot give access to the grain, straining relationships.
Administrators Matthew Richards and Daniel Smith of Grant Thornton were appointed on 2 March at the request of Wellgrain’s directors.
They have until 27 April to produce proposals for how the administration will proceed and a statement of affairs by Wellgrain.
David Perry of NFU panel firm Tees Law (01245 293 190) was hoping to get some clarity from the administrator last week about stored grain but as Farmers Weekly went to press on Wednesday (22 March), no figures had been given. Â Â
The NFU had received 160 calls to its CallFirst members’ advice service (0370 845 8458) about Wellgrain by 20 March.
Advice for those on forward contracts
For those with forward contracts to supply Wellgrain, the starting point for anyone is to read their contract and understand what the terms are, said Paul Rooke, sector head of grain and oilseeds at merchant body AIC:
- Assuming these include the AIC Grain/Pulses 1/16 terms then notice to terminate the contract to supply should be given as soon as possible once the insolvency is known.
- One of the requirements relating to insolvency is that notification should be sent by the administrators to those with contracts still to mature (ie, where the delivery period is in the future). This would also give an opportunity to the innocent party to give notice.
- Rapid electronic communication, including e-mail, is an acceptable form of giving notice, and telephone notification needs to be followed up by written confirmation.
- Notification needs to go to the administrator at the registered office of the party in insolvency.
- It would be good practice to retain a copy of or record what notification was sent, and when, should there be any dispute over its receipt.