Wholesalers outline “urgent support” needed for the food and drink supply chain

When the Covid-19 crisis first hit, the food supply chain was rocked by disruption. From farm to fork, key players including farmers, distributors, manufacturers and retailers were forced to deal with stock imbalances and downturns in demand.

Now, amid the second wave of the coronavirus, a group of business leaders representing food producers, distributors and hospitality businesses have written a joint letter to Chancellor Rishi Sunak to call for “urgent support” to keep businesses afloat.

“Job losses, business and site closures are a reality unless the government extends its new and existing support measures to the hospitality sector and to the distributors who supply it,” wrote industry figures including James Bielby, chief executive, Federation of Wholesale Distributors (FWD), Norman Bagley, policy director, Association of Independent Meat Suppliers and Ian Wright CBE, chief executive, Food and Drink Federation.

The group warned that the food and drink supply chain is at risk of collapse due to the introduction of national curfews and local restrictions, and called for a package of measures to enable the sector to survive.

The group called for an extension of the full furlough scheme in areas under both Tier 2 and 3 restrictions “to avoid a cliff edge of job losses throughout the hospitality and wholesale sectors”. They also urged the government to provide an extension of Business Rates Relief to the wholesale sector. “Wholesalers have not been eligible for Business Rates funding throughout the pandemic because they do not fall within the ‘retail’ category,” the letter says. “The lack of targeted support has left wholesalers depleted.”

Finally, they asked the government for discretionary grants to supply chains at risk of collapse. “Government support for hospitality outlets in Tier 3 has been welcome, but no support has been given to any supply chain businesses which cannot close due to the need to supply public sector food and drink. At this point in the crisis a sustained period without usual sales in Tiers 2 and 3 means a new wave of targeted finance for businesses serving Tiers 2 and 3 must be introduced to prevent the most essential supply chains from collapsing and leaving key sectors without food and drink,” they wrote.

According to the letter, the provision of food to the public sector – such as care homes, prisons, schools and hospitals – is at the most immediate risk because commercial revenue from the turnover distributed to the private hospitality sector underwrites the business supplied to public sector contracts.

“It’s a clear anomaly that this part of the hospitality sector has not received the support that its customers have had,” said James Bielby of the FWD. “It’s particularly anomalous that the supermarkets, which have benefitted from the closure of pubs and restaurants, have received substantial business rates relief while the wholesalers who provide essential supply to the health, education and care sectors have not.”