Ask FWD: Covid-19 crisis update

Five weeks in, how is the sector faring now? Are things settling down?

Wholesalers are coming to terms with the task facing them, and responding with characteristic speed and efficiency, but the extraordinary events of the past month have polarised the fortunes of FWD’s wholesale members. The closure of the hospitality sector in March left our foodservice distributors – responsible for about £11bn turnover, or one third of the total sector – with no customers except their vital contracts with care homes, police stations and private hospitals.

What have you done to help?

Working through Defra, the sponsoring department for food and drink wholesale, we have raised the existential threat faced by foodservice and on-trade distributors at the very highest levels of government, including regular calls with the Secretary of State George Eustice.

We have also worked with the Cabinet Office to build a case of intervention to provide support for these members that goes beyond the grants and loans already announced by the Chancellor. Defra has carried out the largest ever data collection research project from our members, with more than 150 contributing, and all this has been passed to the Treasury for analysis and recommendations for aid.

What’s happening with bad debts?

With their customers closed, and in most cases unable or unwilling to pay for stock already purchased and sold on, these wholesalers need special consideration in order to survive the shut down, and be there to re-supply their hospitality customers when the time comes. We’ve issued an open letter to hospitality businesses, pointing out that the grants they qualify for could and should be put aside for paying their debts to their wholesale partners. The letter was shared to media, and sent by members to their customers.

What about stock?

An urgent priority has been to move on stock stalled in these members warehouses, and we’ve been involved in re-purposing projects that have seen products diverted into retail, used to feed the vulnerable, and sent for blast freezing. We’re working with Local Authorities on extending shelf life of products, and investigating tax relief on stocks donated to charities and food banks. We also set up a specific service for care homes to find distribution partners, called

How is allocation in retail?

The return to in-home eating and a preference for shopping local has boosted demand – and that has created its own supply issues as suppliers struggle to put their stock where the sales are. Consumer behaviour and lower production rates caused shortages in the convenience sector too, which have not completely been rectified. Suppliers have rationalised ranges and dropped some wholesale-specifc skus, but not provided sufficient alternative volumes. FWD members have taken this issue to Defra, which has convened a call with leading suppliers.

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