Food Chain’s $5.9m in unsecured claims won’t be paid, receivers say

Friday, 12 September 2025

Auckland-based food supplier Food Chain is not likely to pay BNZ or unsecured creditors claiming almost $6m.

Receivers for hospitality supplier Food Chain have confirmed there will be no money left for unsecured creditors claiming almost $6 million, as its financial position proves far weaker than previously reported.

Food Chain was started in 2003 by Nick and Jodie Archibald and supplied meat, seafood, frozen, chilled, and dry goods to hospitality businesses across the country. The business operated out of Auckland and Hamilton, acting as a wholesaler that connected suppliers with restaurants and other food service customers like close rival Bidfood.

At its height, it employed 85 people and operated from a large site in Avondale at which there was a warehouse, offices and in-house butchery, as well as supplying its Central North Island network out of a warehousing and distribution premises in Hamilton.

A reduced staff of about 60 were paid when the company closed three weeks before it was tipped into liquidation and receivership by general security holder BNZ on July 4 to recover debt of about $1.6m.

It came after the company “suffered significant trading losses during the Covid period as business from customers operating in the hospitality sector ceased due to lockdowns”, receivers said this week.

“The decline in turnover, combined with increased competition in the food supply industry and higher operational costs, meant the business was unable to continue to trade profitably.”

But receivers confirmed that the hole for creditors could be deeper than initially thought as the value of fixed assets was “considerably overstated”, meaning the balance sheet wasn’t likely to be accurate.

McGrathNicol receivers Andrew Grenfell and Kare Johnstone said in their first report on Thursday that Food Chain had reported $1.9m in inventory as at March 2025, but they had found just $70,000 worth of stock.

But they said: “A significant amount of unpaid stock had been returned to suppliers prior to the appointment of receivers.”

The company had also failed to keep accurate accounts up to the date it ceased trading. Grenfell and Johnstone said security holder BNZ was unlikely to be repaid in full, which would leave nothing for the food distributor’s hundreds of other creditors.

“The receivership is unlikely to return sufficient funds to repay the appointer in full and accordingly there will be no funds available from the receivership for unsecured creditors.”

Unsecured creditors included major food suppliers including Chelsea Sugar, poultry supplier Tegel, red meat business AFFCO, chocolate maker Mondelez New Zealand and produce supplier Balle Brothers. Heartland Bank, Mazda, United Rentals and Mercedes-Benz Financial Services also made the list.

So far, receivers had sold vehicles and equipment, including two vehicles sold to company director Nick Archibald.

But even after auctioning assets and recovering returned stock, the receivers said funds would not stretch to cover preferential creditor claims, including more than $400,000 to Inland Revenue in income tax and GST.

Meanwhile unpaid employee entitlements were at $68,000. Alongside bank payments, lease liabilities and other outstanding costs, the company’s total liabilities added to $9.2m.