The wholesale industry requires access to the same Government support as the retail, hospitality and leisure businesses they supply, the Federation of Wholesale Distributors (FWD) has told a committee of MPs.
Giving evidence to the Environment, Food and Rural Affairs Select Committee, FWD chief executive James Bielby explained that the Government-backed loans currently available to them are insufficient to ensure they can supply restaurants, pubs and hotels as their customers return from lockdown, and they need the Local Authority grants and business rates relief their customers have received.
Research carried out by FWD and Defra shows that a third of wholesaler businesses consider themselves to be at high risk of failure. “The lockdown measures have had a detrimental effect on members, who are continuing at operate at a loss in order to continue to supply their public sector and care home customers,” added Bielby.
“They are having to use reserves, and the Government support that has been generally available, but they haven’t had access to any specific support. Hospitality, retail and leisure businesses have had their rates waived, and a grant from their local authority of up to £25,000. The businesses supplying into those outlets have had precisely nothing.”
He added that re-opening the hospitality sector would be very hard without Government assistance to allow wholesalers to “support, restock, and give credit to their customers as they re-open.”
“Without the sort of sector support we’ve seen for the dairy and fisheries industries, as well as hospitality and leisure, food supply into the hospitality sector will be extremely challenging, because of the cash flow difficulties our members will face as a result of the lockdown measures,” he said.
Ian Wright of the Food and Drink Federation added manufacturers’ backing to the call, saying that funding may need to be regional as well as sector specific, and that a clear indication of support would give distributors confidence to invest knowing that they could survive the “second shock” of a return to lockdown.
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Bielby however did welcome the Government’s announcement that it would underwrite trade credit insurance. “This is critical because some of the customer businesses coming back will have no reliable record of trading in recent months, so it’s a leap in the dark for wholesalers to offer credit.”
He also called for a clear roadmap for reopening hospitality and leisure businesses, alongside schools and other workplaces. ESaying that staging posts were needed to indicate which parts of the market will be reopening and when. “Some wholesalers will be able to open up and resupply within a week but others such as those supply schools would need a longer lead time”