Wholesalers should have access to the same government support as the retail, hospitality and leisure businesses they supply, the Federation of Wholesale Distributors has told an influential committee of MPs.
Wholesalers say the Government-backed loans currently available to them are insufficient to ensure they can supply restaurants, pubs and hotels as their customers return from lockdown, and they need the Local Authority grants and business rates relief their customers have received.
Giving evidence to the Environment, Food and Rural Affairs Select Committee, FWD chief executive James Bielby told MPs that while the Government had offered sector-specific aid to other industries, including hospitality, dairy, and fisheries, the wholesale supply chain had been left to fend for itself.
Research carried out by FWD and Defra shows that a third of wholesaler businesses consider themselves to be at high risk of failure. “The lockdown measures have had a detrimental effect on members, who are continuing to operate at a loss in order to continue to supply their public sector and care home customers,” said Bielby.
“They are having to use reserves, and the government support that has been generally available, but they haven’t had access to any specific support.
“Hospitality, retail and leisure businesses have had their rates waived and a grant from their local authority of up to £25,000. The businesses supplying those outlets have had precisely nothing.”
Bielby said that while Local Authority discretionary grants may be available, the process was “opaque” and FWD members were struggling to access them.
He added that re-opening the hospitality sector would be very hard without government assistance to allow wholesalers to “support, restock, and give credit to their customers as they re-open”.
The Food and Drink Federation added manufacturers’ backing to the call, saying that funding may need to be regional as well as sector-specific, and that a clear indication of support would give distributors confidence to invest, knowing that they could survive the “second shock” of a return to lockdown.
Bielby welcomed the Government’s announcement that it would underwrite trade credit insurance. “This is critical because some of the customer businesses coming back will have no reliable record of trading in recent months, so it’s a leap in the dark for wholesalers to offer credit,” he said.
The FWD also called for a clear roadmap for re-opening hospitality and leisure businesses, alongside schools and other workplaces. “We need staging posts to indicate which parts of the market will be reopening and when. Some wholesalers will be able to open up and resupply within a week but others such as those that supply schools would need a longer lead time,” said Bielby.