Scott’s collapse could see over $500m in perishable food go to waste

Following the news of Scott’s Refrigerated Transport’s collapse, there are whispers that over $500 million in frozen goods could go to waste as the company works to clear out its warehouses to exit costly leases.

With attempts to secure a buyer for the transport giant failing, and the future of the company’s 1500 staff left in the balance, The Australian reports that receiver KordaMentha is attempting to relocate about 114,000 pallets of frozen food from Scott’s 24 warehouses across the country.

With cold storage space scarce, KordaMentha is negotiating with Scott’s landlords and customers in a bid to prevent the food from going to waste.

The Australian reported that the federal government has not currently provided any funding to help shift and store food; but will fund the redundancy entitlements of Scott’s sacked workers, which is estimated to be more than $25m.

Scott’s supplied deliveries to major supermarkets, with Coles and Aldi among its biggest clients, as well as delivering on behalf of suppliers to Woolworths and IGA.

On Monday, 1200 of the company’s 1500 staff were made redundant, with remaining staff being retained to clear stock from warehouses among other duties.

Voluntary administrator McGrathNicol says KordaMentha is working with the Scott’s customers to move their stock.

“However, there is a lot of stock,” McGrathNicol partner Jonathan Henry told The Australian. “In addition, there’s not enough space in the storage capacity to realistically relocate the stock. Negotiations and site visits have been conducted with landlords and customers to determine a pathway forward.

“At some point in the near future, the receivers intended exiting leases, however, commercial arrangements may be reached to continue to provide customers with ongoing access to stock and the receivers continue to employ a small number of staff to assist with that process.”

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