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Farepak
closure will have a serious impact on Scottish customers.
These customers followed the rules and saved for a
one-off expense but still lost out
and that can’t be right.
Deputy Minister for
Enterprise and local MSP Allan Wilson has been asked by First Minister Jack
McConnell to liaise with the Department of Trade and Industry “to get an
assessment of the extent of the problem in Scotland,” following the recent
administration of Farepak Food & Gifts (FFG)
Mr Wilson who met with the British Retail Consortium/Scottish Retail
Consortium (BRC/SRC) to discuss the next steps and report back to the
Scottish Parliament, expressed his concerns over the company’s collapse and
what it will mean for Scottish customers.
“I knew from constituents contacting my office that the Farepak closure
would have a serious impact on Scottish customers” said Mr Wilson.
“When the company entered into administration I was immediately concerned
that thousands of customers across Scotland would have lost money in the run
up to Christmas. These customers followed the rules and saved for a one-off
expense but still lost out and that can’t be right.
“In addition to meeting with BRC/SRC, I will be writing to Ian McCartney,
Minister of State for Trade, Investment and Foreign Affairs to get a clear
picture on how Scotland is affected by this and what steps are being taken
to support customers and agents.
“I am encouraged that the PM’s office is considering becoming involved in
writing directly to major retailers asking them to assist the families under
the auspices of the BRC scheme. I will continue to monitor this situation
closely and consult with colleagues to determine how we can best ensure
minimum impact for Scottish customers, including those of my constituents
adversely affected.” concluded Mr Wilson.
NOTES:
1. Shagun Dubey and Martha Thompson, Business Restructuring partners at BDO
Stoy Hayward LLP, were appointed as Joint Administrators on Friday 13th
October 2006, over FFG.
2. Amongst other activities FFG operated a Christmas voucher and hamper
club. People contributed to the club on a regular basis throughout the year
and would normally expect to receive their vouchers at this time and hampers
towards the end of the year. Roughly 80% of the business was voucher based.
3. The Administrator’s current estimate of customers’ money paid in by the
agents so far this year is £41m, but the total loss figure will be higher
because of the commissions due to the agents.
4. The BRC is considering with its members this week the practicality of
making some form of goodwill gesture to Farepak customers.
5. Early estimates suggest that there are around 25,000 agents UK-wide
dealing with around 120,000 customers with a potential loss of £41m.
6. In Scotland – of the top 50 agents 30 are in Scotland with average loss
£400 per family.
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