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.
The Hop Farm is currently mothballed for the winter season and not open for business.
It's unclear how many staff are employed at the site near Tonbridge. A spokesman declined to comment on any possible job losses.
A spokesman for the Hop Farm at Paddock Wood has told ITV News Meridian that the business arm of the attraction has currently ceased trading.
He added that it is contacting suppliers to warn them of their difficulties.
In recent years the Hop Farm Festival has attracted some major names including Prince, Bob Dylan, Peter Gabriel and Sir Bruce Forsyth.
According to its website, there are still plans for the festival to go ahead in 2013 although the line-up has yet to be announced.
A first tranche of tickets to be released has already sold out
There are reports that one of Kent's biggest tourist attractions is set to close.
Kent Online is reporting that the The Hop Farm in Paddock could close shortly. It claims it has been hit by huge debts from a music festival held there last year.
A 43-year-old man has been arrested on suspicion of possessing cannabis resin with intent to supply and a 34-year-old man have been arrested on suspicion of possessing cannabis resin.
The men are in custody at Tonbridge police station and will be interviewed today.
Officers from The Kent and Essex Serious Crime Directorate are investigating the find.
The case is being headed by Detective Sergeant Tristan Kluibenschadl who said: "This is a significant seizure and we have been successful in taking a huge amount of drugs off the streets.
"If anyone has any information surrounding the supply and use of drugs, please contact the police, all information received is treated in the strictest confidence."
Police have seized 200kg of cannabis resin with an estimated street value of over £1m.
Officers arrested two men as they met in a gated driveway in Queen Street, Paddock Wood, Kent at around 4.30pm yesterday.
Two vans were seized and officers found cannabis resin that may be worth as much as £1.5m.