Paul Hill takes a look at the latest coronavirus government developments affecting the channel
With large parts of the wholesale channel still under enormous threat due to the current lockdown restrictions, a light appears to be at the end of the tunnel following calls from 52 MPs to re-examine the government’s packages for wholesalers.
In an open cross-party letter to the chancellor, 31 MPs have said there is a “clear anomaly” that food and drink wholesalers are not eligible for relief through the Hospitality, Retail and Leisure Grant scheme. A further 21 MPs wrote independently expressing the same concerns.
This comes after a Defra survey of FWD members found that nearly 50% of respondents are in danger of going into liquidation by the end of the year. FWD chief executive James Bielby said: “There is widespread recognition among parliamentarians that, as an integral part of the machinery of economic growth, wholesalers need the same support as the restaurants, pubs, hotels and workplace caterers they supply and support.”
Unitas managing director Darren Goldney added: “It is simply unjustifiable that hospitality outlets received rates relief and grants, but the wholesalers supplying the very same outlets get neither. Salt is not rubbed but scrubbed into the wound as we watch multiple retailers whose sales have grown get rates relief, too.”
Goldney believes the solution is for the wholesale industry to be honest about who needs what. “This is challenging in a group like Unitas where all our members want rates relief. However, in reality, the priority must be those wholesalers whose customer base is hospitality,” he said. “I believe the solution is convincing the government that wholesale is not one amorphous entity, demonstrating how a ‘customer base’ criteria assessment could be the filter to qualify meaning.
“Right now, we need to be honest and pragmatic to get what we want or risk failing. Retail-biased wholesalers need support on supply allocations and the right margin to ensure independent retailers can sustain the footfall forever, while foodservice wholesalers need money.”
Meanwhile, the Scottish Wholesale Association (SWA) has welcomed the Scottish government’s intention to reopen hospitality and tourism businesses following the announcement from tourism secretary Fergus Ewing that businesses should prepare for a “provisional return to trading with appropriate safety guidelines” on 15 July, 11 days after the reopening date in England.
Chief executive Colin Smith explained that the closure of sectors has been a major blow to Scotland’s wholesalers, with some of its members losing 90% of their income overnight. “Even now, they are losing more than 60% of their turnover when they should be gearing up for a successful summer,” he said.
“However, until we know whether the Scottish government will be relaxing the two-metre social-distancing measure there will be huge concern about the viability of the hospitality and tourism sectors and all the supply chain businesses that rely on them.” Goldney echoes these thoughts. “Clarity on the social distancing debate would be welcome and any movement is economically sensible,” he said.