Unitas Wholesale managing director Darren Goldney has made a plea to the government to offer more support to the wholesale channel during the coronavirus pandemic.
Goldney said while the buying group’s members were “standing firm and fighting” to tackle the issues facing them during the ongoing coronavirus crisis, additional help is needed.
“While the bounce in retail is still being felt, it has posed challenges around stock, supply and staffing. There have been plenty of resources produced to support customers who, in turn, support communities, such as social distancing retail kits and home delivery set-up support,” he said.
“Meanwhile, our 70+ on trade and foodservice members are feeling differing and more extreme pressures. Some are facing complete demand stoppage and temporary shut down, while others are approaching the even more difficult challenge of having a trickle of demand from vulnerable customers such as care homes and hospitals, but still having a cost base that needs all the sales in order to be financially viable.”
He said bad debt issues have also mounted with customers cancelling direct debits as their businesses are forced to close, while perishable stock was also going out of date.
While he praised the government for acting with “massive investment”, he said the industry and government need to work collectively on a government-backed scheme to ensure the grant system is used to pay wholesaler credit, or the government must support the bad debt.
“The interest-free loans at the time of writing still appear inaccessible to wholesalers who, for generations, have worked to create an asset value that may preclude these loans and force a situation where they can borrow, but at commercial rate and with no guarantee of debts to them being paid in the future,” he explained. “Some might argue this is a disgrace. Some may argue it’s a lack of understanding, but either way, it’s a heart-wrenching situation.
“The Government must back its theory that small business can keep going, and debt will be paid by the billions it is flooding in to them. If not, then underwrite it. Why should wholesalers or suppliers have to otherwise?”
He added: If government underwrite the debts, suppliers can extend credit in confidence, knowing they can see the route to being ‘whole’, too. In the meantime, supply parity with the multiples on SKU availability and substitutions is critical for UK wholesalers to help keep the UK fed.”