Greenhouse vegetable grower Lakeside Produce Inc., headquartered in Leamington, Ontario, filed for bankruptcy on January 17, 2023, owing $188 million to a broad swath of suppliers ranging from freight logistics, packaging and brokerage firms in Canada to greenhouse companies in the United States, Mexico and the Netherlands.
With $166 million in secured debt to the Bank of Montreal and Farm Credit Canada, the trade creditors will be hardest hit with $22 million in arrears. Several Ontario greenhouse growers are owed considerable sums, totalling more than $2 million. In Canada, the ripple effects will also be felt by greenhouse growers as far afield as Alberta and British Columbia. The degree of hurt for logistics, packaging and transport companies will depend on their size. Again, the pain will be felt mostly in southern Ontario.
The reverberation will continue to American companies in California, Arizona, Texas, Florida and elsewhere. Particularly hard hit are a number of greenhouse-growing companies in Mexico.
The family-owned company under the leadership of president Chris Cervini produced greenhouse cucumbers, peppers and specialty tomatoes. The team has focussed on delivering fresh, flavourful produce to families for 75 years. Anthony Cervini led the company for many years before handing over day-to-day operations to his son, Chris. The bankruptcy filings list $3.5 million in assets.
According to LinkedIn, Lakeside has conventional and organic greenhouses, warehouses, pack houses, and distribution centers spanning across North America including Leamington, Ontario, Taylor, Michigan, and McAllen, Texas. As of the bankruptcy announcement, the company’s website is no longer being maintained.
Richard Lee, executive director, Ontario Greenhouse Vegetable Growers cannot comment on any individual member, but predicts that the sector is facing some challenging times specifically due to inflationary pressures felt globally.
“We are not exempt from the increases in input costs, labour challenges and supply chain disruptions,” says Lee. “The only unique thing about this financial climate is that all prices have increased across the board at the same time. Our members are facing historically low returns for their produce, rising input costs that include labour, heat, water, packaging, transportation and taxes while trying to manage our day-to-day activities to support food security in North America. As we focus on post-pandemic activities, Ontario farmers will be engaged in a fight for survival and the ability to remain sustainable.”
With these combined pressures, consolidation is the buzz word in every sector. “From what I’ve experienced, nothing is impossible and the cards are stacked against the supply service companies that we all heavily rely on,” Lee says.
As the Lakeside Produce bankruptcy shows, the interconnectedness of the greenhouse business is global. No one is exempt from these increased costs or changes in borrowing terms at higher rates of interest.
“I think bankruptcies and consolidation will occur globally and we will learn from these economic highs and lows for years to come,” Lee concludes.
Ernst & Young Inc, the insolvency trustee, has announced that a meeting of creditors will be held February 2, 2023 at 1 pm.