Let’s get this partly started – Bielby
After three months of minimal trade, unpaid bills from customers and warehouses piled high with stock slowly approaching the end of its shelf life, the foodservice distributors within the FWD membership raised a weary cheer at the government’s announcement that the hospitality sector could begin to reopen from 4 July.
But it’s only one cheer, not three. The damage done in those three months of trading, in some cases 95% down, has taken its toll on the distributors just as much as their customers. More so, in fact, because where restaurants, pubs and entertainment venues have benefited from the Retail, Hospitality and Leisure Grant Fund among other lifelines, wholesalers have had nothing.
In June more than 60 MPs wrote to the Chancellor of the Exchequer to express their concern over what they called a ‘clear anomaly’ in support finance. Other tabled Parliamentary Questions, raised the issue in debate, and spoke with FWD members to better understand the impact of the government’s mistake in excluding the supply chain that would bring hospitality back from the brink when the time came.
Perhaps most galling for our foodservice members was seeing the multiple retailers, who had gleefully gobbled up all the food sales that hospitality would normally fulfill, being given business rate relief and other financial support. Record sales gets you government assistance, it appears, while desperately staying in business to maintain care home and school contracts, and helping feed the sheltered and most vulnerable, gets you nothing. Decisions were made quickly, in circumstances never encountered before, but that doesn’t excuse the fact that the government got it badly wrong, and at FWD we have spent every day since trying to persuade the Chancellor to amend his error.
It’s not enough for Mr Sunak to point out that the customer base is now back in action. Many caterers won’t come back at all, and those that do will be operating at well below their previous capability. Cash is the fuel of food distribution, but it is always in use and rarely stockpiled. No business can get very far without it, especially when operating on the fine margins that our members do.
Granting business rate relief to our members is the single most effective measure the government can take, right now, to fill the tank of this supply chain to hundreds of thousands of catering businesses. It would give wholesalers the breathing space to rebuild stock and allow credit terms to their customers, even those who have yet to pay for products bought before the start of lockdown. With credit insurance guarantees for those who use it, and discretionary Local Authority grants for those that have been awarded them, there is a glimmer of light at the end of the tunnel, as long as hospitality businesses can find the model that enables them to trade at a profit, while passing consumer cash up the supply chain.
That’s not going to be easy. The revised guidance on social distancing doesn’t immediately look like it will provide an inviting and encouraging environment for diners, and the public may be reluctant to spring back into old out-of-home habits while the threat of infection remains. What we can rely on is the always inventive partnership of wholesalers and caterers, and the support of product suppliers who are just as keen to get sales flowing again.
Of course those suppliers have their own production and allocation issues and no doubt those negotiations with wholesalers are ongoing. I know it’s a great relief for many of our supplier members to be able to get back out on the road and visit their wholesale customers again.
If there’s one thing we need from them more than any other, it’s support in shifting the remaining short-dated stock that has sat in warehouses since March. Best Before dates, which have never been a measure of food safety, are not binding; EU legislation, the FSA and WRAP all confirm this. Caterers will be cautious of accepting what they believe are unsafe goods, so we need a concerted effort from suppliers, wholesalers and government to persuade them that the stock wholesalers already hold is nothing of the sort.
Has there been any upside to lockdown? Not for the regional family businesses and national distributors now looking at redundancies as the minimum cost of survival. For those on the retail side, there’s the hope that local shopping, home delivery and renewed public esteem for independent stores will continue. The digital revolution, always on the horizon, may well have happened while we were looking elsewhere.
From FWD’s point of view, I hope that the noise we have generated in Westminster and the media will ensure that this industry is never overlooked by government again.business rates coronavirus covid-19 Foodservice FWD Government hospitality James Bielby Members retail wholesale