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Failed School Lunch Provider Puku Ora Had Big Tax Bill
Susan Edmunds, Money Correspondent
A school lunch provider that went into liquidation at the end of January owes Inland Revenue more than $600,000, a liquidators' report reveals.
Gisborne-based Puku Ora has four business lines, liquidators McDonald Vague said: Catering services, provision of school lunches under a government contract, the Puku Ora Eatery and the manufacture and sale of bone broth.
But the liquidators said in their first report that the business had built up significant tax arrears, which resulted in Inland Revenue serving it with winding up proceedings in January.
Directors said the company failure had been caused by the revenue hit of Covid-19 and Cyclone Gabrielle, and the changes to the school lunch programme as a result of the change of government.
As a result of those changes, the company lost six school contracts and had its revenue drop substantially.
Puku Ora co-founder Amy Wray posted on Facebook in February explaining they were in the situation because of government changes.
"With the Ministry's decision around going to a national supplier for school lunches we have lost the core foundation of our business, which has made it extremely difficult to continue operating.
"We're heartbroken to have to say goodbye, as over the years we've poured our hearts into this place...into nourishing our community, delivering kai for all our school lunches and kids and providing a space where people could come together over food."
Her co-founder Erana Ngakuru said was a tough decision to make.
"This may come as a shock and it's been a lot for us to process, but we want to take a moment and acknowledge and thank every single person that has supported us on this journey," she said.
The liquidators said the directors had tried to cut their costs by reducing the amount spent on labour but they were unable to address the significant debt that had accumulated.
The report said there was $38,136 owing to former employees for wages, holiday pay and redundancy pay.
IR was also claiming $623,523, of which $389,960 would be preferential.
There were also unsecured creditors to the business, they said, with claims just over $28,000, not including the unsecured portion of what IR said it was owed.
It was not the only school lunch provider to hit tough times.
Libelle, which had been contracted by Compass to produce 125,000 meals a day, was placed into liquidation.
The school lunch programme has been mired in controversy with complaints about inadequate and poorly prepared meals.
The School Lunch Collective, of which Libelle is a member along with Compass and Gilmours, said its priority remained ensuring the students continued to receive the meals.
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