Supermarket food distributor goes BUST amid HGV driver chaosSeptember 24, 2021
Asda and Sainsbury’s food distributor goes BUST leaving 1,000 workers unemployed amid HGV driver chaos with the Government urged to bring in the ARMY to drive petrol trucks and retailers warning that shortages could decimate Christmas dinner
- EVCL Chill had a number of major contracts for supermarkets and employed around 1,000 workers in warehousing and HGV driving roles
- The company was responsible for delivering 10,000 pallets of food and drink a day into the two retailers
- The collapse adds to concerns that Britain is facing a ‘winter of discontent’
- Food supply chains have been placed under intense stress by the HGV situation and a CO2 crisis
A private equity-backed haulage firm specialising in chilled food deliveries to Asda and Sainsbury’s has gone bust, adding to concerns about gaps on shelves as Britain heads for a ‘winter of discontent’.
EVCL Chill, a subsidiary of EV Cargo, filed for administration, adding to speculation that the two supermarkets will need to take-over the business to safeguard deliveries.
The company had a number of major contracts for supermarkets and employed around 1,000 workers in warehousing and HGV driving roles.
It comes amid worry that Britain will be faced with severe food shortages this winter due to a lack of lorry drivers and an ongoing energy crisis.
Several of Britain’s biggest retailers on Friday warned ministers the government had 10 days to save Christmas from ‘significant disruption’ due to the lack of HGV drivers.
Among the issues threatening a winter of discontent are:
- A shortage of natural gas causing a spike in gas bills for millions of Britons, along with the possibility of dozens of small energy firms going bust;
- However ministers say ‘there is no question of the lights going out, of people being unable to heat their homes. There will be no three-day working week, or a throwback to the 1970s’;
- A shortage of natural gas leading to the closure of fertiliser plants, which produce the CO2 used in fizzy drinks and the meat industry;
- The Government has since agreed a deal with fertiliser firms to restart a factory in a bid to maintain CO2 production;
- A lorry driver shortage which is crippling the UK’s transport industry, leaving to empty shelves and slow delivery times;
- Bosses say this could impact both of Christmas dinners and have an impact on the number of toys on the shelves;
- Now bosses of major fuel firms have warned they will have to start shutting petrol stations because there are not enough lorry drivers to effectively distribute to all of its petrol stations;
- It comes after the Bank of England warned yesterday that surging household energy bills would send the cost of living spiralling by more than 4 per cent this winter – the highest rate of growth for a decade
EVCL Chill, a subsidiary of EV Cargo, filed for administration yesterday, adding to speculation that the two supermarkets will need to take-over the business to safeguard deliveries.
EVCL Chill was responsible for delivering 10,000 pallets of food and drink a day into the two retailers, who according to The Grocer have been in talks with administrator PwC for several weeks in a bid to safeguard a significant proportion of their chilled operations
It comes amid worry that Britain will be faced with a ‘winter of discontent’ characterised by severe food shortages due to a lack of lorry drivers and an ongoing energy crisis
EVCL Chill operated depots in Penrith, Rochdale, Crick, Alfreton, Daventry and Bristol, and employed around 1,000 workers serving many of the nation’s Sainsbury’s and Asda supermarkets.
EVCL Chill was responsible for delivering 10,000 pallets of food and drink a day into the two retailers, who according to The Grocer have been in talks with administrator PwC for several weeks in a bid to safeguard a significant proportion of their chilled operations.
Unite the union, which has over 500 members at the company, is seeking to ensure that the workers employed directly on the Asda and Sainsbury’s contract will be transferred to work directly for the supermarkets as part of a rescue package.
It is owned by venture capitalists Emergevest which, as a separate company, will avoid picking up the cost of the collapse, such as redundancy payments.
Unite national officer Matt Draper said: ‘The collapse of EVCL Chill at a time when there is huge demand for lorry drivers in particular, further calls into question the role and involvement of venture capitalists in UK industry.
‘There is something fundamentally wrong in a system which allows the wealthy owners of a company to avoid paying for its collapse while the taxpayer has to pick up the pieces.’
Sainsbury’s said it is putting in place measures to secure deliveries.
A spokesman said: ‘We are in close contact with EVCL Chill Ltd. We have continuity plans in place to ensure operations continue to run smoothly and are confident customers will be able to buy what they need when they shop with us.’
The news came just hours after several of Britain’s largest retailers warned ministers they have just 10 days to save Christmas from ‘significant disruption’ due to the lack of HGV drivers.
The British Retail Consortium said that disruption over the festive period will be ‘inevitable’ unless the shortfall of an estimated 90,000 drivers is addressed, while MPs have said the Army could be used as a short term fix amid increasingly dire warnings over the damage the driver shortage could do in the coming weeks unless urgent action is taken.
Ministers have reportedly discussed contingency plans for the Army to be brought in to drive petrol tankers to station forecourts but it is thought they would only be enacted as a last resort.
Agriculture Secretary George Eustice has indicated that the government is preparing to extend the Seasonal Agricultural Workers Scheme (SAWS) this year to help tackle the UK’s HGV crisis
Transport Secretary Grant Shapps suggested adding HGV drivers to the skilled worker list for immigration purposes would not solve the problem, although he insisted he nothing had been ruled out
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