German meats supplier Allgäu Fresh Foods (AAF) has filed for insolvency protection proceedings amid “increasing” cost pressures.
In a statement announcing the move, the company said it submitted the application to the competent district court in Kempten on 22 April.
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The Feneberg Group subsidiary said cost and price pressures have been “increasing simultaneously” in this business segment for many years.
“To ensure continued success in the future, the company must implement extensive restructuring. This includes, among other things, reducing the company’s financial burdens through insolvency protection proceedings in order to gain the necessary freedom to shape a secure future,” it added.
The filing initiates a protective shield procedure, a special provision under German insolvency law introduced in 2012, allowing the company to develop an independent restructuring plan within three months.
The meats supplier will remain under court oversight and the guidance of a provisional administrator during this period.
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By GlobalDataLeibold Consulting restructuring team managing director Stephan Leibold said: “This step offers us the opportunity to maintain our business activities and restructure ourselves.
“We believe in our existing business model of quality, organic, and regionality and will henceforth integrate it into the existing market environment in a sustainable manner and operate safely there,” he said, adding the protective shield procedure provides confidence in realigning the company’s direction.
Attorney Jochen Sedlitz, a partner at law firm Grub Brugger, said: “Initial measures have already been successfully implemented, and salaries and jobs are secured through the insolvency compensation from the Federal Employment Agency and the protective shield.
“Business will continue as usual, and customers will be supplied as usual.”
Allgäu Fresh Foods was formed through the merger of Hans Dietz butchery in Schopfloch, the Reiter butchery in Augsburg, Bühler, and the Feneberg butchery in Kempten.
It offers meat, sausage, and delicatessen products.
The company has roughly 450 employees across its facilities in Kempten, Bavaria, and Schopfloch, Baden-Württemberg.
Just Food has asked Leibold for further comment.
