Buyer caution opens food machinery price gap

By Guy Montague-Jones

- Last updated on GMT

Related tags: Machine, Auction, Manufacturing

In the wake of the economic crisis, a second hand food processing machine bought at auction is now selling for an average of a quarter of what it would cost new, according to a food equipment auctioneer.

Mark Flynn, director of Pro Auction, said that before the crisis a bidding frenzy could lead to the sale of a second hand machine for more than the same machine would cost brand new.

Such feverish bidding is no longer a feature of the market as buyers and sellers take on a much more cautious approach. Flynn said buyers are now only interested in machines that they need and they stick to a set budget, avoiding getting embroiled in bidding wars.

Typical prices

This means that machinery sold at auction is now going for around a quarter of the new price. For example, Flynn said an 8 year-old multipack machine that costs £220,000 new, recently sold for £60,000 while a steam injected cooker for the bakery industry made in the late 1990s went for £8,000 and would cost £60,000 new.

The auctioneer said the price gap between new and second hand machinery is one of the reasons for an upsurge in demand in recent months.

Buyer caution

Overall Flynn said demand has dipped since 2008 but that the second hand market has benefited from buyer caution. He said financial restrictions have given companies an incentive to buy used rather than new. And because food processors are now buying equipment to get a job done rather than in anticipation of future work, the lower lead times with used machines are attractive.

Over the last couple of years UK-based Pro Auction has also benefited from the weakness of the pound. This has prompted an increase in demand from Europe, especially Eastern Europe where food manufacturers have been supported by government grants.

Flynn said buyers of second hand equipment come from across the food industry from small companies with limited budgets to big companies looking for back-up machines or equipment to support a new product launch.

Related topics: Processing & Packaging

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