Fife’s Buffalo Farm plunged into administration owing more than £3 million to creditors before the director founded a new company with the same herd.
Almost 600 people who gave up to £10,000 as part of a crowd-funder to Fife’s Buffalo Farm have been told not to expect any return on their investment.
The Buffalo Farm, which operated from Boglily Farm in Kirkcaldy, went bust in March.
Steven Mitchell, who ran the firm, has set-up a new company after receiving money from a private investor to buy back the herd and keep the 59 jobs on site.
The company has subsequently changed its name to TBF Realisation and assets are being sold to cover the more than £3 million due to creditors.
And the new operation, which continues to trade from Boglily Farm with Steven Mitchell as director, is known as The Buffalo Farm Produce Ltd.
It still brands itself as The Buffalo Farm on its website and signage.
Contract arrangements with supermarkets and suppliers including German giant Aldi have been ripped up.
Mr Mitchell has claimed angry investors have encouraged businesses to distance themselves from The Buffalo Farm in its current form.
How much did The Buffalo Farm owe?
Administrators FRP Advisory have published their proposals and report into the process carried out after the firm went bust.
Company debts totalled more than £3m, with £600,000 owed to Alicia Bank and £35,000 due to energy firm N-Power.
The Buffalo Farm was also in debt to HMRC to the tune of £537,000.
HMRC chasing this debt through a statutory notice accelerated the collapse of the original company, FRP said.
In the report, administrator Callum Carmichael of FRP said: “The company attempted to diversify in 2018 as it opened a café and further diversified in 2020 as it transitioned into a buffalo dairy, with emphasis on the production of buffalo mozzarella.
“The transition proved to be challenging and poor herd performance significantly impacted milk yields available to the dairy.”
To compound the herd’s misery, an outbreak of bovine TB led to a number of them being culled, and their movements limited.
Administrators noted a return to supermarket buying from customers, following efforts during the Covid-19 pandemic to “buy local”, drove down sales.
They said a “pre-package” sale of the company to Mr Mitchell was agreed, in part to preserve the welfare of the buffalo and to protect 59 jobs.
Founders claim they’ve been left ‘high and dry’
In 2022, The Buffalo Firm held a crowdfunding drive, which would see investors become “founders”, entitled to a number of benefits and offers.
Included in this was £100 per month to spend in the farm shop and other perks like naming buffalo in the herd.
People could invest between £1,000 and £10,000. A total of 596 people pumped around £1m into the company.
As the firm got into further difficulty in June 2023, the line of credit was suspended.
In March 2024, founders were written to informing them of the administration.
A minority ‘do not want business to recover’
Responding to the findings in the report, Mr Mitchell claimed a vocal minority of founders left out-of-pocket now wanted the new venture to fail.
He said: “We are working hard to try and salvage a business from this terrible situation and preserve the jobs and the herd.
“We are still a long way from having a sustainable future and this has been significantly impacted by a minority, but significant number of our founders want to ensure that we don’t recover.”
Conversation