Arable sector in shock at grain merchant collapse

The news sent considerable shock-waves through the arable sector and marked a further decline in competition within the grain trade, which has recently fallen into fewer hands through failures, acquisitions and mergers.

The business, which was run by former Scotland rugby star, Jim Aitken, operates five grain stores across East Scotland and the Borders area, has a turnover of around £100m and employs 40 staff.

A spokesman for the administrators said that the business had been suffering from weaker trading in recent months following a poor harvest in 2020 and a contraction in demand stemming from the Covid pandemic. It had also continued to be hit by legacy losses on dealings with the failed Philip Wilson Group.

The business wind down, which aims to maximise value to creditors, will now involve confirming title to stock held in the stores and to the extent owned by third parties, liaising with owners on stock disposals. The owned grain stores and plant and equipment will also be marketed for sale.

Joint administrator and partner at business advisory firm FRP, Chad Griffin said: “Alexander Inglis & Son is a key supplier of cereals and barley to the whisky, distilling and allied industries. The storage facilities are very well equipped and in strategic locations. We will now focus on marketing the assets for sale and would urge interested parties to contact the Edinburgh office of FRP as soon as possible.”

But the news that a major Scottish-based grain merchant was in financial difficulties created considerable angst across the country’s arable sector.

For while trading losses might remain an issue for growers who have recently traded with the company, a large number of producers who hold malting barley contracts with the merchant for delivery this coming harvest remain uncertain over where the obligations will lie for crops already sown.

Commenting on the reports, NFU Scotland chief executive Scott Walker said that members had contacted NFU Scotland this week to make the union aware that the East Lothian grain trader was experiencing difficulties but at the time the position had not been clarified.

However Walker added, “Many NFU Scotland members will be customers of the company and we will work to establish what implications any change in business arrangements will mean for them in terms of honouring any payments they are due and any grain contracts they may have with the company for the coming season,” said Walker.

But the news also marks a further reduction in the level of competition operating in the grain trade in Scotland – with recent mergers and acquisitions having already seen those trading in the sector reduced to a mere handful of operators.

The time may now be ripe for grain growers to create a producers organisation to co-operatively market grain.