Supermarket disaster looms as major logistics company goes broke in Australia threatening stock shortages and higher prices
- Trucking firm Scott’s Refrigerated Logistics goes bust
- Scott’s is a link in the major supermarkets supply chain
- Coles, IGA, Woolworths and Aldi say they are adapting
One of Australia’s biggest suppliers of supermarket goods has gone bust threatening shortages and even higher prices for the nation’s hard-pressed grocery buyers.
Scott’s Refrigerated Logistics, a huge trucking firm that ships products for Coles, IGA, Woolworths and Aldi supermarket suppliers went into receivership last month.
Receivers KordaMentha were initially hopeful of finding a buyer but the company’s huge debts sunk those hopes on Friday.
KordaMentha has announced the company will be wound up with the loss of 1500 jobs and a fire sale planned for the firm’s 500 trucks and more than 1000 trailers.
Ominously KordaMentha partner Scott Langdon told news.com.au that the items shipped by Scott’s could start disappearing from shelves.
Scott’s Refrigerated Logistics (pictured trucks belong to the company) is to be wound up
‘Due to the financial situation of Scott’s, there is a genuine risk of an uncontrolled wind down, and as a consequence, we cannot guarantee the services available to provide customers and ultimately get the end products onto the retail shelf,’ he said.
‘We have no confidence in the current situation that it will be an orderly wind down.’
Coles and Woolworths have their own fleet of trucks to deliver directly to the stores however a number of smaller to medium suppliers relied on Scott’s to get products to the distribution centres.
A spokesperson for Coles told Daily Mail Australia the supermarket giant had been working quickly to arrange alternative logisitics.
‘Our focus remains on continued availability of refrigerated products in stores and online for customers,’ the statement reads.
Supermarket giant Coles has moved to assure customers alternative supply arrangements are being made after the receivers announced Scott’s would go out of business
‘We are working quickly to transition to our other transport partners and are closely monitoring deliveries across our supply chain.
‘We are working hard to minimise disruption for customers and our farmers and suppliers as deliveries ramp up.’
Woolworths made a similar statement to Daily Mail Australia.
‘We realise that Friday was a difficult day for Scott’s and its employees,’ the Woolworths spokesperson said.
‘We’re working closely with our impacted suppliers to maintain continued products to our distribution centres.’
The Transport Workers’ Union has said that the razor-thin margins demanded by buyers such as Aldi (pictured) threaten to fell a number of other logistics companies
Aldi and IGA also have also issued assurances they are finding alternate means to keep up their supply chains.
Scott’s, which was bought by equity fund Anchorage Capital Partners for $75 million in June 2020, is understood to have been hemorrhaging cash since at least mid-way through 2021.
Covid-fuelled shortages in goods and labour have been blamed along with the major flooding events in agricultural areas of NSW, Victoria and Queensland over the past two years.
Transport Workers’ Union national secretary Michael Kaine said the factors that brought down Scott’s are threatening to fell other logistics companies unable to pass on rising costs because of the pressure asserted by big buyers such as Aldi.
Mr Kaine told the Australian Financial Review Scott’s collapse ‘is a tragedy of a supply chain crisis caused by squeezing transport contracts and profiting off the razor-thin margins of operators’.
Supply chain difficulties are one of the factors driving Australia’s runaway inflation of 7.8 per cent.
The inflation report for the December quarter last year showed wholesale prices for food had shot up by 7.4 per cent compared to 4.9 per cent in the first quarter.
