As expected, chilled foods distributor EVCL Chill collapsed into administration over the weekend.
The Derbyshire-based firm – a division of the independent logistics group EV Cargo – employed just over 1,000 staff operating from warehouses and depots across the UK. The business has around 400 lorries across its transport network, alongside more than 20,000 pallets of warehousing capacity, servicing manufacturers and leading food retailers, including Asda and Sainsbury’s.
The company, which was bought out of insolvency by EV Cargo last year, has faced a series of headwinds recently, including the lorry driver shortage, increases in supply chain costs, and contract losses. In the period to December 2020, the business generated a turnover of over £167m.
In a statement issued on Saturday, administrators PwC said a number of sale options had been explored but generated limited interest.
Last week, it was reported that Sainsbury’s and Asda were considering taking over some of the operations should the company collapse.
Without naming specific companies, PwC revealed that 658 staff and a number of services have been transferred to key customers under their contractual arrangements, which provides continuity for parts of EVCL Chill and those customers.
Eddie Williams, joint administrator, said: “This has been a very difficult situation and involved intense discussions with key stakeholders on an accelerated basis to get to this position. As businesses move from survival mode to recovery, the financial climate is still very volatile.
“I am pleased that at least 658 roles will continue in a sector that is already facing many difficulties and challenges around inventory, personnel and the wider supply chain. Some vital continuity and stability has been ensured for a number of EVCL Chill’s stakeholders.”
A spokesperson for Sainsbury’s commented: “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 administration does not affect the wider EV Cargo business which continues to trade as before.
The news of EVCL Chill’s collapse came ahead of the government announcing that it would issue 5,000 temporary visas for HGV drivers to prevent shortages at Christmas. However, haulage chiefs said the move was far too little to resolve the country’s supply chain crisis.
NAM Implications:
- Every little helps…
- …as the HGV driver jobs will be secure…
- …and as many support jobs saved as possible.
- Big issue will be the inevitable rise in inflation resulting…
