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SOUTHLAND BUSINESS

Scratch Dinkum Dog

August 30, 1987|MARTHA GROVES

Dinkum Dog couldn't cut the mustard in California.

The hot dog from Down Under, introduced to us Yanks with some fanfare 1 1/2 years ago, has faded from the scene now that Dinkum Dog Inc. of Santa Fe Springs has filed to liquidate under Chapter 7 of the U.S. Bankruptcy Code.

At about $1.50 each, the hot dogs--sold in an unsplit bun with a variety of condiments--were featured at such local attractions as the Spruce Goose and Queen Mary, the Los Angeles Zoo and Magic Mountain.

Australian businessman Larry John Powell brought the frankfurter idea to the United States from Sydney, where it has been a hit at the Opera House and other locations. But here it didn't pass muster, according to James M. Reynolds, company chairman and head of an investor group that backed Powell.

"The basic problem is that the American market is different from the Australian market," Reynolds said, adding that the company didn't research the market adequately. Of the investors' loss, Reynolds said: "We're out real money, let's put it that way."

Reynolds said the heavy U.S. spending has "crippled" the Australian operation and forced it into bankruptcy. But Powell, back in Sydney, maintains that the Australian Dinkum Dog licensees are operating "bigger and brighter than ever."

Powell and Reynolds do agree on one thing--that the U.S. company failed because of insufficient capital. An estimated $700,000 was spent on start-up costs, but Reynolds said he wouldn't attempt the venture again unless he had more than three times that amount.

A petition filed in U.S. Bankruptcy Court in Los Angeles lists 52 creditors, including law firms, food suppliers and even a pest control company. As of March 31, the document shows, Dinkum Dog had assets of $703,569 and liabilities of $560,595.

John Knowlton, president of Kona Coast Products in Westlake Village, which supplied sauces, said he found out about the company going to the dogs about a month ago but hasn't yet been contacted by attorneys. "They owe me about $1,200," he said.

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