Organisers of the festival added that anyone who had already bought a ticket would receive a full refund from their ticket agents.
A statement issued on behalf of promoter, Vince Power, said: "We've worked very hard to try to make it work but it's proved too much a of mountain to climb and despite fighting hard...based on poor ticket sales and the forecast selling rate substantial losses would be made.
"It is a surprise for us that after 8 weeks of heavy marketing and with such a great bill that we have to cancel, though we are convinced this does not reflect on the artists, it highlights the poor economic climate."
Organisers of this year's Hop Farm Music Festival have announced that this year's event has been cancelled.
A bleak summer has left the company behind Kent's Hop Farm Festival facing an uncertain future.
The Music Festivals group has suspended its shares after failing to raise fresh funds to support the business. The group recently warned it expects a full-year loss after weak ticket sales at the Hop Farm event and lower profits at its Spanish festival, which were both headlined by Bob Dylan.
Sir Bruce Forsyth is to share a stage with Peter Gabriel, Bob Dylan and Suede at this year's Hop Farm Music Festival.
The veteran entertainer is performing with his big band at the festival in Paddock Wood in Kent.
The Hop Farm Festival takes place each year at Paddock Wood in Kent. The event is on Friday 29th July, Saturday 30th July and Sunday 1st August.