Supermarket disaster looms at Coles, Woolworths and Aldi

One of Australia’s largest suppliers of supermarket goods has gone bankrupt, threatening shortages and even higher prices for the country’s struggling grocery buyers.

Scott’s Refrigerated Logistics, a huge transport company that ships products for supermarket suppliers Coles, IGA, Woolworths and Aldi, went into receivership last month.

Curators KordaMentha initially hoped to find a buyer, but the company’s huge debts dashed those hopes on Friday.

KordaMentha has announced that the company will be liquidated with the loss of 1,500 jobs and a planned fire sale for the company’s 500 trucks and more than 1,000 trailers.

Ominously, KordaMentha’s partner Scott Langdon told news.com.au that the articles sent out by Scott’s could disappear from shelves.

“Due to Scott’s financial situation, there is a real risk of an uncontrolled run-down, and as a result we cannot guarantee the services available to serve customers and ultimately get finished products onto store shelves,” he said.

“We are not confident that the current situation will become an orderly winding down.”

Coles and Woolworths have their own fleet of vehicles to deliver directly to the stores, but a number of smaller to medium sized suppliers have relied on Scott’s to deliver products to the distribution centres.

A spokesman for Coles told Daily Mail Australia the supermarket giant was working quickly to arrange alternative logistics.

Our focus remains on the continued availability of refrigerated products in stores and online for customers.

Supermarket giant Coles has moved to reassure customers that alternative supply arrangements are in place after receivers announced Scott’s would go out of business

“We are rapidly transitioning to our other transportation partners and are closely monitoring deliveries in our supply chain.

“We are working hard to minimize disruption to customers and our farmers and suppliers as deliveries increase.”

Woolworths made a similar statement to Daily Mail Australia.

“We realize that Friday was a difficult day for Scott’s and its employees,” said a Woolworths spokesperson.

“We are working closely with our affected suppliers to supply our distribution centers with products.”

The Transport Workers’ Union has said the razor-thin margins demanded by buyers like Aldi (pictured) threaten to drive a number of other logistics companies out of business

Aldi and IGA have also given assurances that they are finding alternative ways to maintain their supply chains.

Scott’s, which was bought for $75 million in June 2020 by equity fund Anchorage Capital Partners, is said to have been bleeding cash since mid-2021.

Covid-fueled shortages of goods and labor are blamed, along with major flooding in the 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 threaten to fall on other logistics companies unable to pass on rising costs because of pressure from big buyers like Aldi.

Mr. Kaine told the Australian financial statement Scott’s collapse “is a tragedy of a supply chain crisis caused by straining transportation contracts and taking advantage of operators’ razor-thin margins.”

Supply chain issues are one of the factors driving Australia’s runaway 7.8 percent inflation.

The inflation report for last year’s December quarter showed that wholesale food prices had risen 7.4 percent, compared to 4.9 percent in the first quarter.