Supermarkets seek to safeguard supply as Scott’s Refrigerated Logistics goes under with loss of 1,500 jobs
Mikaela Ortolan and Anna Chisholm
Supermarkets are working to make sure that supply is not compromised after confirmation that major freight company Scott’s Refrigerated Logistics will fold after failing to find a buyer.
- Scott’s Refrigerated Logistics has failed to sell after entering voluntary administration last week
- 1,500 employees will lose their jobs
- Supermarket giants Coles and Aldi have pulled work from the company and are working to shore up supply
About 1,500 people will lose their jobs following the collapse of the company.
The company entered voluntary administration last week and appointed KordaMetha as the receiver.
KordaMentha was hoping to find a buyer for the company but was unsuccessful in doing so and staff have been notified of their redundancies.
The national freight company has depots in every mainland Australian state and was the sole supplier of refrigerated products to supermarket giants Coles and Aldi.
Both Aldi and Coles have made contingency plans to safeguard the supply of goods for customers.
“We have worked with our existing logistics partners to ensure the 3 per cent of Scott’s business managed for Aldi now transitions to other logistics partners,” an Aldi spokesperson said.
“As we transition the volume, we will work to minimise any impact to Aldi customers with regard to product availability and to ensure continuity of product collection from our valued supplier partners.”
The spokesperson said the employability of Scott’s employees will be high given the demand in the industry.
A Coles spokesperson said the company was working to minimise disruption for customers, farmers, and suppliers as deliveries ramped up.
“Our focus remains on the continued availability of refrigerated products in stores and online for customers,” the spokesperson said.
“We are working quickly to transition to our other transport partners and are closely monitoring deliveries across our supply chain.”
KordaMentha’s Scott Langdon said it could not carry out a typical sale process because the company was in such a fragile financial position.
“If we had some more financial assistance we could see the business close in a dignified way, in a way that has harm minimisation to employees and customers, but ultimately the business will be wound up and the employees will not be employees of Scott’s going forward,” he said.
Mr Langdon said the company could start to wind up as early as Monday afternoon if financial support from the federal government or other stakeholders could not be obtained.
“This is a very unique situation in my 20 years at KordaMentha,” he said.
“This is definitely probably the most intense situation that we’ve found.
“Our heart sinks for the employees, the situation they find themselves in, the uncertainty they find themselves in.”
He said, given the financial situation, the company would enter into an “uncontrolled wind-down”.
“That means that in all likelihood we will not be able to produce our services to customers, and the customers ultimately won’t be able to deliver to retailers on a business-as-usual basis.”
Small to medium retailers will be impacted the most, including farmers, many of whom have products ready to be picked up by Scott’s and transported around the country.
“One of the customers said we have 5,000 pallets of fresh watermelons in Bundaberg that were going to be taken by Scott’s in the week ahead. We won’t be able to produce that,” Mr Langdon said.
KordaMentha predicts the areas hardest hit will be in Far North Queensland, the Mildura region in Victoria, the Riverina in NSW, and Renmark in South Australia.
Mr Langdon said KordaMentha was doing what it could to facilitate new employment for staff.
The Transport Workers Union said the news had come as a shock but was not a surprise.
“It’s very hard for [Scott’s employees] to comprehend how companies like Aldi can make millions of dollars worth of profit, yet their company that is servicing that company has actually gone broke,” state secretary Richard Olsen said.
He said the union was working with all companies that had expressed a recent shortage of drivers to find employment options for those now in need.
“We think there are quite a number of jobs available,” Mr Olsen said.
“We don’t know if it’s going to be for everyone but we’ll do as much as we can, both in related industries in general transport and outside of it, such as in the bus and waste industry,” he said.
He said with mortgage stress and the cost of living rising, many would be feeling the impacts.
Mr Olsen warned there would also be a “rippling effect” that might cause some disruption to supply across Australia.
“Plenty of companies have been contracting to Scott’s that may well be out of jobs and therefore further employees or other transport workers would find themselves out of work,” he said.
“It would not be unreasonable to think that there’s more to follow as a result of Scott’s folding but hopefully it will be minimal.”
The union is calling on the government to act urgently on transport industry reforms before them.
More links to this Article – Mick Raven
KordaMentha takes the keys at Anchorage’s Scott’s Refrigerated
Anchorage Capital Group – Wikipedia
Partnering with us — Anchorage Capital Partners
Anchorage Capital Partners Acquires Scott’s Refrigerated Logistics
Leave a comment