Kwik Save collapse: welcome to Third World Britain!

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10 July 2007

Kwik Save was put into administration last Friday. 1,1000 workers lost their jobs and 90 stores were closed. These workers will not get a penny from the administrators, KPMG. Even though nobody has been paid since 21 June.

But hundreds of workers had been working for 6 weeks without any pay, already - waiting for a "rescue" deal to be finalised. They will not be paid their money, while only 56 stores might be rebranded and reopened - via yet more dodgy deals involving the very same people that have presided over Kwik Save's collapse.

Last month 700 staff lost their jobs when the company closed 81 shops. They have been told they will get no redundancy pay.

This is a scandal. Since when, in the 4th richest country in the world, did workers not get paid the wages they worked for? The non-payment of pensions was, and is, outrageous, but this is a step towards turning conditions for workers in Britain into Third World conditions!

Kwik Save had been selling low cost basics to the least well-off for 50 years. But it has been lagging behind the competition for quite a while - ever since Somerfield, which bought it in 1998, made a mess of it. The stores were sold to "Back to the Future" (which sounds like a sick joke) just 16 months ago. And guess what? This is a group of private investors - private equity funds - that had no intention of turning the supermarket around. They were not even attempting to make a success of the business they had bought.

No, the idea was to strip it of all its worth, "refinance" its debt - in other words take out the cash, burden the company with more interest to pay back, and then dump it. But even though this came slightly unstuck, the "private investors" are unlikely to lose a bean, thanks to the way the bankruptcy laws favour shady bosses and dodgy practices.

As for the workforce, they never even figured in these bosses' equation in the first place. And unlike the case of MG Rover, when the government itself stepped in to pay workers' wages, the general election is not just around the corner, so nothing will be done.

As one sacked Kwik Save worker pointed out - "it is immoral". Yes it is. Or rather, this is the "morality" of the capitalist system, exposed for what it is.