Bielby: ‘Government by headline’ twists the knife in wholesalers’ backs
Yesterday’s u-turn on vouchers for free school meals by the government and the Department for Education is not without consequence. At the end of two weeks of last-minute decision making on education, the upshot is that good honest people are on furlough as of today.
Before Christmas, the government were adamant schools would stay open on the basis they were low risk. Schools placed order for food from their wholesale partners in preparation before going off on two weeks’ holiday.
Stock was ordered in accordingly by wholesalers ready for shipment in January. They also bought stock in preparation for a no-deal Brexit as the negotiations with EU dragged on.
Stock bought for Christmas was still hanging around: the November lockdown and then the tier system put paid to any prospect of shifting that. But not to worry, schools were open in January and the tier system allowed some trade. So all was not lost, despite absolutely no sector specific support coming from the Treasury.
Wholesalers had been trading at a loss since March 2020, staying open to supply schools, hospitals and care homes with food. Retailers and hospitality outlets had been given business rates relief, including billions of pounds to supermarkets seeing record sales. Wholesalers? Absolutely nothing.
The Treasury wasn’t’ interested in the least, Defra doing a good job at listening but not much more. Never mind that 5,000 people had lost their jobs and family businesses were burning through reserves at a rate of knots. No support from government. That’s where we were on 4 January.
Then the new lockdown was announced by Boris Johnson, taking effect at midnight on 5 January. Schools closed, hospitality largely shut down. Remember, we had Brexit stockpile, Christmas stock which was impossible to sell and now orders placed for and by education.
All of that stock suddenly redundant. How much? £12 million of excess stock, all of it created by misinformation and planning failure by the government. Schools sent back orders placed before Christmas. The treasury announced a support package, but of course there was nothing for wholesale.
The outlets got another injection of cash, no questions asked. Wholesalers could apply to local authorities for small discretionary amounts. O Frabjous Day! A full £12MILLION of stock that had to paid for with no one to sell it to.
Wholesalers took to the airwaves, with some heroic interviews with Creed Foodservice, Dunsters Farm, Savona Foodservice and others. Nina Warhurst highlighted in on BBC Breakfast. Still nothing by way of help by Defra and the Treasury.
Then Marcus Rashford got involved and highlighted the waste issue. Anything that can be donated to FareShare et al is of course done so. But much of this stock can’t be donated as it’s too big, needs specialist storage or it’s just not wanted by food banks and charities.
Still Rashford was interested and that’s a positive. And we still had our free school meal packs which were keeping wholesalers afloat in the absence of any government support. High-quality food parcels for those in need.
Unfortunately some of the parcels offered by non-FWD member wholesalers weren’t as good. The Chartwells offer that did the rounds online wasn’t up to scratch. There was uproar on social media after Rashford rightly called this out. FWD’s Coral Rose did the same.
Yet as a result the government did another U-turn today and changed the Department for Education guidance on free school meals and reintroduced the voucher scheme. Government by headline. No strategy or consistency. Just following the news, not leading it.
Remember, there is £12m of excess stock in the wholesale channel that the Treasury won’t help with. There has been no business rates relief, no sector-specific support. Just family-run businesses trading at a loss to supply care homes and hospitals, using up reserves or loans.
Well, thanks the government’s U-turn there’s a lot more excess stock in wholesale now, after schools cancelled the food parcels in their droves. Supply orders have been made by wholesalers for the next few weeks to supply FSM. All that trade taken away instantly.
People are back on furlough as a result of this decision. And a sector on its knees due to the lack of Treasury support just took another kick. No business rates support, no grants, nothing. Another avenue to keep the channel going has vanished.
And where can the vouchers be redeemed? Supermarkets! That’s the biggest irony of all. The government has today handed wholesale trade directly to the supermarkets – just to chase a headline. Wholesale ignored and overlooked again, while supermarkets make record profits.
Still, Boris has taken the heat off himself so never mind that children won’t benefit any more and people are now furloughed…coronavirus covid-19 Foodservice FWD Government James Bielby schools wholesaler