The next few months are going to be tough for a lot of food and drink companies. And the announcement of further restrictions this Wednesday will only compound the many issues already in play.
Worst affected, of course, will be those wholesalers and suppliers most exposed to foodservice, because regardless of what the government says (or does, or did), a significant number of companies and individuals will ignore its advice and either curb or cancel their Christmas plans. It was already happening last week – before the latest restrictions came in – so one shudders to imagine how bad it’s going to get.
And the timing of Omicron’s emergence could not be worse. There are just two weeks left till Christmas, meaning lorries, warehouses, and retail storerooms are packed to the gills with food and drink ready for the festive celebrations. Hospitality in particular needs a great Christmas to generate income to fuel it through the dark empty months of the new year. If it fails to capitalise this year, having already endured many months of lockdown, expect the closure boards to start rolling out before January’s even up. There’s not even the furlough scheme to support affected staff.
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One also fears for suppliers. Even those in the grocery space. As we report, small businesses in particular, are struggling to secure cost price increases at a time of rampant inflation. And a recent report from Make UK, the trade body for British manufacturers, warned that thousands of firms faced a perfect storm of rapidly rising costs and mounting debts that could push many over the brink. Compounded by the supply chain crisis, 48% said they were struggling to fulfil orders, which have made the situation even worse.
Not surprisingly, fears of a Covid-related spike impacting further on the workforce crisis are now rippling across the industry. And while it is good news that HGV drivers are exempt from mandated PCR tests to help keep lorries moving smoothly, the real concern should be warehouse workers. Not only does the nature of their work mean an outbreak there is more likely, there is a growing threat of industrial action. And even if some strikes have been averted ahead of Christmas, unusually, there are more to come in the new year. The government has done a great job of keeping the country going in Covid but is this the point at which, with no authority and no furlough, the wheels fall off?
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