A chilled foods distributor whose customers include Asda and J Sainsbury is on the brink of collapse as a maelstrom of headwinds including acute driver shortages threatens further disruption to grocery retailers’ supply chains.

Sky News has learnt that EVCL Chill – a division of the independent logistics group EV Cargo – is close to being placed into administration.

Industry sources said on Tuesday that the business, which employs about 1000 people, was holding talks with its largest customers about contingency plans that would ensure continuity of supply.

Those discussions will raise hopes that a significant number of job losses can be averted even as the company plans for its subsidiary’s insolvency.

Nevertheless, its impending insolvency comes at a sensitive time, with respected industry voices including Ian Wright, the Food and Drink Federation chief executive, warning that shoppers will be confronted by empty shelves during the coming months.

PricewaterhouseCoopers is being lined as the prospective administrator of EVCL Chill, according to market insiders.

The division was previously called NFT Distribution and is a key logistics partner for its customers in ambient and chilled foods.

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It was placed into administration early last year before being bought out of insolvency by EV Cargo, its existing owner.

Details of its current financial predicament were unclear on Tuesday, but industry sources cited ongoing issues with driver shortages and wider supply chain costs and challenges were likely to be key factors.

The larger EV Cargo group is owned by Emergevest, a private equity investor, and is not in financial trouble.

EV Cargo and PwC both declined to comment.

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