Government action needed if wholesalers to survive to serve vulnerable groups

20 March 2020 by
Government action needed if wholesalers to survive to serve vulnerable groups

Wholesalers serving hospitals, care homes and other public services have said they need immediate government support if they are to survive following the large-scale closure of the hospitality sector.

Members of the Federation of Wholesale Distributors, who provide food and drink to both public and private sector businesses, have seen a 70% decline in trade since the prime minister issued advice to avoid pubs, restaurants and other social venues on Monday.

As well as the stark drop in orders, many of the operators that have closed will be unable to pay for stock they have already purchased.

James Bielby, chief executive of the Federation of Wholesale Distributors, said: "We need government to protect the supply chain to the most vulnerable people in our society. Foodservice distributors have seen their market disappear overnight. With the vast majority of their customers closed, and schools closing soon, we desperately need government support to maintain vital supply chains."

Ken Knowland, chairman of Savona and the Country Range Group of wholesalers, told The Caterer: "The chancellor has got to do something today that will save businesses and will save the care sector, because we will not survive unless something dramatic happens."

Half of Savona's business from the hospitality industry effectively disappeared earlier this week, with a further quarter set to dramatically reduce from today, when schools close to most children. This leaves care homes, which alone are not enough to sustain the business model. On top of the loss of business, the group is owed money by many operators who have closed their doors for the time being, and Knowland reiterated that grants would be required to cover this if wholesalers are to survive.

Bielby added: "The loans offered by the chancellor this week would not even cover the credit owed by customers whose own businesses have been destroyed. We are asking him for support in the form of grants to meet payroll commitments, buy stock from suppliers, and keep the wheels rolling.

"We also need the measures the chancellor made available to hospitality businesses on Monday to be extended to the wholesalers who supply them. We need a business rates holiday, clarity on credit insurance, and extended credit with our own suppliers."

Philip de Ternant, managing director of Creed Foodservice, told The Caterer the government does not appear to appreciate the importance of the wholesale supply chain.

He said the supermarket supply chain, though resilient, will not be able to step in given the pressure it is facing and the the differences in product portfolios. De Ternant explained that many smaller care homes, that would previously have used supermarkets, have come to his business after finding shelves empty this week.

But Creed 10- or 15-bedroom care homes will not make up the shortfall in trade the managing director explained: "We have got stock, but we have not got much cash. We are not like retail, we give credit, so we are owed for stock delivered in January and February by businesses that have now closed

"If we do not have support then the next two to three weeks will be serious for all of us, and who then will deliver to care homes, hospitals and prisons."

The Federation of Wholesale Distributors members supply and support 350,000 catering businesses, including hotels, pubs, care homes, takeaways and cafés. They provide food for hospitals and social care establishments, prisons, government and military contacts, as well as schools and nurseries.

Picture: Shutterstock

Savona Foodservice opens to the public >>

UK trade associations call on PM to protect supply chains >>

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