This item was published during the term of a previous administration that ended in April 2007
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Minister consults on Farepak situation
26/10/2006
Deputy Minister for Enterprise Allan Wilson today expressed his concerns over the recent administration of Farepak Food & Gifts (FFG) and what it will mean for Scottish customers.
Mr Wilson who met with the British Retail Consortium/Scottish Retail Consortium (BRC/SRC) to discuss next steps said:
"I am disappointed that Farepak Food & Gifts have entered into administration and am concerned that thousands of customers across Scotland 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 today, 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 will continue to monitor this situation closely and consult with stakeholders to determine how we can best ensure minimum impact for Scottish customers."
Background
Shagun Dubey and Martha Thompson, Business Restructuring partners at BDO Stoy Hayward LLP, were appointed as Joint Administrators on Friday, October 13, 2006, over FFG.
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.
The Administrator's current estimate of customers' money paid in by the agents so far this year is £41 million, but the total loss figure will be higher because of the commissions due to the agents.
The BRC is considering with its members this week the practicality of making some form of goodwill gesture to Farepak customers.
Early estimates suggest that there are around 25,000 agents UK-wide dealing with around 120,000 customers with a potential loss of £41 million.
In Scotland of the top 50 agents 30 are in Scotland with average loss 400 per family.