Health Insurance, Fuel Costs Top Reasons Mid-Sized Company Goes Out of Business

SALT LAKE CITY – In a recent article, St. George News reported the closing of Hi-Grade Meats, a long-standing reputable meat supplier based out of Salt Lake City.  At the time of writing, the vice-president, Randy Maxfield, was on vacation and unable to give comment.

Maxfield has since provided us interview and explained the factors that have driven the closing of the company; those factors have merit to the original story but also resonate with struggles many small and mid-sized businesses are facing in this economy and with new regulations imposed on businesses and increasing costs of doing business.

“It wasn’t sudden,” Maxfield said.  “We were trying to take care of customers, make more credit . . . but we lost Maverick Country Stores as a customer about 2 ½ years ago – they decided to go a different direction, had been a customer of ours for over 20 years.”

Maxfield said that the company has been struggling and has continued to operate as long as they could, that the family has put a lot of their own resources into the effort.

He indicated that the loss of Maverick as a customer wasn’t the only factor contributing to the economic struggle of the company.  “The increased fuel cost of distributing the product,” is another.  “Competition is stronger, it’s difficult to retain your market share.”

Maxfield continued, “Meeting the requirements a mid-sized company, 70 or more employees, is required to provide is extremely hard to do.”

“We are required to provide health insurance, we’ve tried to look at every option; a few years ago we tried to find a self-funded plan, but our group had some poor experiences with that.”

Maxfield summed it up with a sigh, “it’s tough to put your finger on one thing, but health insurance, fuel cost, and just increased competition – they make it more difficult to put your finger on.”

For those unfamiliar with the offerings of Hi-Grade Meats, they include various hot dogs, sausages and other meat products; some of these being items that can be priced only so high are likely difficult products to sell, with cost increase absorbing the company costs of fuel, medical insurance and the like.

With Hi-Grade Meats closing, and the concern of employees for losing their jobs, Maxfield said that he is sorry if their people feel they were blindsided, and indicated that the company is pursuing negotiations with a couple of companies who may be interested in taking over, even if under a different operation that would engage some of Hi-Grade’s employees.

Another thing Maxfield said that Hi-Grade is trying to do, as they exit the market, is to help those families and small companies who have relied on Hi-Grade’s quality products.

“We are scrambling to help those we have had a business relationship with to make key products, some that are even proprietary for them, 30-40 years, that are unique.  We are trying to find someone that can assist them so their businesses are not negatively impacted.”

Hi-Grade has maintained an excellent reputation since it opened its doors 56 years ago.  It will be a loss to its customers and the state, as they seek to wind down with honor.

Email:  [email protected]

Copyright  St. George News 2011

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  • elliemae August 5, 2011 at 8:29 pm

    Geez, it’s too bad that this company, which was extremely profitable for years, didn’t feel that the employees are worthy of health insurance. They lost a large contract, yet choose to blame the employees whose only transgression was to give their effort to make the business profitable. Yes, they were paid – but health insurance is necessary if you’d like to have healthy employees. Seems to me that they didn’t value their employees at all.

    Obviously, instead of looking to expand its market, this business chose to rely on one customer. It was only a matter of time with a business plan that poor. I’m sure that the owners of the business aren’t hurting financially and aren’t worried about their health insurance.

    It’s so nice that Mr. Maxfield was able to take a vaction. His employees, who are out of work, probably aren’t as fortunate.

    • smokeater321 May 5, 2014 at 11:15 am

      You shouldn’t say things bad about anyone if you don’t know what your saying. I worked for them for sometime and they have always been family minded and the employees were the family. When they were making money and a good profit, they paid 100% of family insurance. They would also give you paid sick leave and do what ever they could to help. It’s not that they didn’t want to insure thier people. It’s that with the current government has made it so expencive that it was a choice of making employees pay alot more and raise prices so much that no one would buy the product. They aren’t the only company that “obamacare” and oil companies have run out of business.

  • Michael West August 6, 2011 at 12:57 am

    Most Europeans shake their heads in disbelief at the American health system. In Europe everyone pays higher taxes, which go directly to doctors and hospitals. There are no greedy insurance companies that take a huge cut of the money before paying the doctors and hospitals.. and more importantly because it is taxpayer money, no employers are required to pay anything. And the quality of care is just fine.. and most important of all, everyone is covered. No one falls through the cracks.

    Sadly it will never happen in America as long the lobbyists keep scaring Americans with that nasty Socialism.

    America has the best politicians money can buy.

  • CurtisB August 6, 2011 at 3:40 am

    I didn’t read anywhere that the company was blaming the employees. Health coverage is expensive – most employees don’t realize how much an employer pays for it. Coverage is also expensive under socialized health. You want to see waste and then run your tax dollars through a bureaucracy and see what little comes out the other end.

    • jennzz August 24, 2011 at 3:22 pm

      It doesn’t look very good when a company goes under or closes suddenly and people are going on. cuts to the president and vice I’m sure that’s unheard of

  • Paul Pearce August 6, 2011 at 9:29 am

    Comment removed

    • Jen Watkins August 6, 2011 at 10:13 am

      We do not allow personal attacks or profanity on our site. Your comment obviously falls under one of those categories and will be removed.

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