Wellington, Oct 30 NZPA - Fresh food supplier Speirs Group said it is difficult to make a profit supplying supermarkets since the industry reduced to two major players.

Speirs Group has sold its finance business, leaving it with a fresh food business. Its comments about the buying power of supermarket groups follows remarks this week on the issue by fish suppliers.

NZAX-listed Speirs Group has a significant share of the market for supplying fresh salad and vegetable products to supermarkets nationally.

"Over the past two years or so we have found the going to be tough, particularly since the supermarket operators were reduced from three to two consequent upon the Woolworths purchase of Progressive Enterprises," chairman Nelson Speirs told the annual meeting.

There were now only two chains of supermarkets -- Woolworths, which has the Countdown brand, and Foodstuffs, which runs Pack'n' Save and New World stores.

The supermarket groups kept their suppliers in "constant competitive mode", he said.

"We have found it difficult to break even during this time," he said.

The company expected a modest recovery in its traditional foods business this financial year but a full recovery would take longer.

Liquidity continued to be a problem for the group.

"The company is squeezed for cash," Mr Speirs said.

Initiatives to be announced shortly should improve cashflow.

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