Time Wholesale

  • As many as 40 of the 119 respondents may go bust in the next three months, the survey suggests

  • Foodservice wholesalers that haven’t folded are trading with as little as 20% of normal sales

 

Just over half the UK’s wholesalers fear they will be forced to fold before the end of 2020 without further financial help.

This is the stark finding of a major government survey of wholesalers caused by the coronavirus crisis.

The poll, carried out by the Federation of Wholesale Distributors on behalf of Defra, suggests more than £200m of key public sector food contracts are at risk.

Social care and education contracts will be worst hit, the report suggests, putting the supply of £100m worth of food for schools and care homes in jeopardy.

In just the next three months the survey suggests as many as 40 of the 119 respondents may go bust, 95% of which are categorised as small businesses with a turnover of up to £45m.

The Grocer understands five wholesalers have already folded, while 50 FWD members stopped trading and furloughed staff as lockdown was implemented, while those foodservice wholesalers still open are trading with as little as 20% of normal sales.

The FWD has urged the Treasury to include wholesale businesses under its Retail, Hospitality and Leisure Grant Fund and offer them business rate relief.

“This survey demonstrates the need for an injection of cash into the sector,” Said FWD CEO James Bielby: “Initial support for hospitality left out wholesale and that was a mistake that needs to be rectified. Retrospective support has been given to the fisheries and dairy sectors which has set a precedent,” he added

Wholesalers have also criticised the disparity between financial help from the devolved powers. In Scotland, wholesalers with a turnover of up to £45m were eligible to apply for a share of the £90m pivotal enterprise resilience fund.

A third of the Scottish Wholesale Association’s eligible membership have since been awarded grants of up to £100,000 each. “This funding is the difference between survival and closure,” said SWA CEO Colin Smith. “That’s the fine line we are now treading. Without this support the supply chain won’t be there to support the hospitality industry when it reopens.”

Darren Goldney, MD of Unitas said: “Foodservice and on-trade wholesalers remain completely perplexed and frankly angry as to why their customers have received support in grants and business rate holidays while their own plight has been ignored.

“At the heart of the issue is a fundamental lack of under-standing of what wholesale is, which has meant too much financial support was provided to too many businesses that didn’t actually need it, and not enough is seemingly left for those that really do.”

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