Supermarket disaster looms at Coles, Woolworths and Aldi

Truckies are staging protests outside Aldi stores across Australia in the wake of the collapse of a logistics firm they claim was forced to the wall by the supermarket’s hard bargaining. 

Scott’s Refrigerated Logistics, a huge trucking firm that ships products for suppliers of Coles, IGA, Woolworths and Aldi, has collapsed with receivers KordaMentha on Friday saying the company would be wound up at the loss of 1,500 jobs. 

The Transport Workers Union (TWU) has pinned the calamity squarely on German-owned cut-price retailer Aldi.

‘There will be 1500 devastated families today as workers stare down the direct consequences of wealthy companies like ALDI squeezing the life out of transport contracts,’ TWU national secretary Michael Kaine said.

‘Scott’s Refrigerated Logistics is a major casualty of an industry-wide crisis that’s pushing operators and drivers to the brink, which will have an enormous impact on our essential grocery supply chains.’

The TWU will hold protests at some Aldi locations on Tuesday in most capital cities including Sydney, Brisbane, Melbourne, Adelaide and Perth. 

Aldi has strongly rebuked the TWU’s statements, saying it ‘had hoped the challenges facing Scott’s could have been overcome’.

‘Statements made by the TWU with regard to our business results and our supplier relationships are categorically untrue, baseless and damaging,’ ALDI Australia said via a spokesperson.

‘We refute this commentary from the TWU in its entirety.’

The supermarket says it comprised only three per cent of Scott’s business.

However, the union is not backing down. 

‘Unlike Coles and Woolies, Aldi has refused to sign a supply chain charter with the TWU and instead tried to silence truckies in court but lost twice,’ Mr Kaine said.

KordaMentha says a fire sale is planned for the Scott’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 supermarket shelves.

‘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.

The company’s 1,500 staff have been told to keep turning up to work and are yet to be given end dates for their employment.

The company will owe worker’s about $50million in entitlements – which taxpayers will likely cover under the federal government’s redundancy scheme.

The TWU wants companies such as Linfox, ACFS, Ron Finemore Transport and FBT Transwest to step up and find positions for Scott’s workers.

According to the TWU, almost 200 transport companies have become insolvent in the 2021-22 financial year.

“Scott’s is not the first transport company to be pushed out of the market by profit-hungry clients at the top of supply chains, and it won’t be the last unless we enact reform to ensure those clients are accountable for fair, safe and sustainable transport contracts,” Mr Kaine said.

Mr Kaine is also calling on the government to do more to support workers by bringing in transport reforms to make contracts more favourable to suppliers.

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.