Iconic food manufacturer in administration

Well-known Melbourne cake company Susan Day Cakes has become the latest victim of Australia’s ultra-competitive food sector after it was placed in the hands of administrators.

The company, which celebrates its 60th birthday this year, has been a fixture in Melbourne supermarkets for decades. It is one of Australia’s largest manufacturers of so-called “ambient” cakes and is best-known for its Madeira cakes, lamingtons and cake rolls.

The business was placed in the hands of administrators Dennis Turner and Luke Targett of accounting and insolvency firm PKF on March 17.

Targett told SmartCompany that it was too early to comment on the state of the business or the reasons for its decline, although the company’s manufacturing plant in the outer Melbourne suburb of Hallam remains in operation.

A first meeting of creditors will be held on March 28.

The exact reasons for the collapse of the business are unknown at this stage, although sources say as much as 80% of Susan Day’s products were sold to Coles and Woolworths, either through their own brands under private label arrangements.

With the two supermarket giants engaged in a bitter price war and a seemingly never-ending drive to take costs out of their businesses, manufacturers are being caught in the crossfire.

Earlier this year, the collapse of commercial refrigeration manufacturer Frigrite was blamed on the loss of key contracts with Coles and Woolworths.

The union United Voice, which represents workers at the site, declined to comment on news of the collapse.