One of Australia’s largest trucking companies supplying Coles, Woolworths, IGA and Aldi collapses
- Scott’s Refrigerated Logistics has collapsed
- KordaMentha administrators have been appointed
- They are confident that a buyer can be found
A trucking company that supplied all of Australia’s major supermarkets has collapsed, raising fears it could be the first of many amid the rising cost of doing business.
Sydney-based Scott’s Refrigerated Logistics, which is the country’s largest cold chain logistics operator, went into voluntary administration on Monday.
The business is a key driver of goods for Coles, Woolworths, Aldi, IGA and Foodbank Australia, with Scott’s management, KordaMentha administrators and supermarket executives set to hold crisis talks this week.
Inflation, disruptions in the global supply chain, wild weather, a shortage of workers and the Reserve Bank’s nine consecutive interest rate hikes have not only affected consumers but also crippled many businesses. .
KordaMentha is now looking for a buyer for the struggling company, which has 1,500 workers, in the hope that its significant assets such as its fleet of trucks and warehouses will make it an attractive purchase.
Australia’s largest cold chain logistics company, Scott’s, went into administration
“It’s been a tough couple of years in the logistics space for a lot of companies and Scott is one of them,” KordaMentha’s Scott Langdon told Nine’s Today Show on Tuesday.
Langdon said he was confident of finding a buyer for Scott’s which is already “inundated with people interested in buying it.”
Insolvency Australia, which produces the bi-annual business insolvency index, says businesses are under pressure.
“We start 2023 just as we ended 2022, with rising interest rates, rising cost of living, labor and material shortages and the tax office continuing its toughest debt collection stance,” said director Gareth Gammon. .
In the first half of 2022/23, appointments of directors and external controllers rose 62 per cent, compared with the same period last year, the index published on Tuesday shows.
Meanwhile, the Transport Workers Union says operators in the transport sector have been left to fend for themselves in a broken market.
“Retailers are reaping the profits from razor-thin margins, while carriers and drivers are collapsing under the pressure,” said National Secretary Michael Kaine.
The TWU said it was working with KordaMentha to ensure workers get priority over what they hope ends up in a sale to a ‘responsible’ buyer.
Coles said he was working to minimize the impact on consumers.
“We are aware of the challenges facing one of our transportation providers and are working hard to provide support and minimize the impact this could have on customers and product providers,” a spokesperson said.
The company supplies all major supermarkets with supermarket executives holding crisis talks this week (Pictured: Shoppers struggle with empty shelves at a Sydney supermarket)
Woolworths has posted a strong rise in first-half profit but warned of slower profit growth in coming months as customers adjust their buying behavior amid high inflation.
Chief Executive Brad Banducci noted that consumers were switching to cheaper private-label groceries and canned goods.
“Inflation continues to affect the way customers shop, but the overall impact on our business at this stage remains modest,” he said on a call with investors.
‘Inflation is coming down, but not as fast as we would like. We remain very focused on ensuring that customers can get their money’s worth through our various price reduction programs, low price specials, personalized offers and range selection.”
Australia’s top supermarket operator on Wednesday reported first-half net profit of $845 million from continuing operations, an increase of 24.9 percent from a year earlier.
