Sunday, October 18, 2020
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Rishi Sunak warned public sector’s food supply at risk | Business

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The supply of food to care homes, schools, hospitals and prisons is at risk unless the government steps in to support struggling wholesalers, the UK chancellor, Rishi Sunak, has been warned.

Trade bodies representing major food companies said the loss of business from the hospitality sector, which has been rocked by the 10pm curfew and limits on household mixing, meant that firms which also serve the public sector could fail.

“Without the income from the commercial sector, the supply of food to institutions such as care homes, prisons, schools and hospitals is at immediate risk,” they told Sunak in a letter seen by the Guardian.

They highlighted items made especially for care homes and hospitals, such as easy-to-swallow foodstuffs for people who have difficulty eating.

“Wholesalers send specialist food to care homes and this cannot be replaced by deliveries from supermarkets,” said the Federation of Wholesale Distributors and the Food and Drink Federation.

“The same supply chain is also essential to the ongoing supply of food to primary and secondary schools for the provision of school meals.”

They urged Sunak to hand out discretionary grants and extend the furlough scheme to wholesalers in areas under tier 2 and 3 restrictions, to avoid supply warehouses closing.

They also want business rates relief to be extended to the wholesale sector.

“The above measures are essential to ensure continuity of critical public sector food and drink supply and the government must introduce them immediately,” they said.

Andrew Selley, chief executive of wholesaler Bidfood, said the industry had not been eligible for support offered to hospitality businesses affected by the government’s tiered system of Covid-19 restrictions.

“Our customers range from Michelin-starred chefs through to high street casual dining, cafes, restaurants, pubs, workplace, travel catering and all of those in areas that have been affected,” he said.

“But we also do schools, universities, care homes, hospices and prisons. That varies by wholesaler but it’s about 70% hospitality and 30% public sector. When 70% of your customer base is impacted, your income goes down significantly.

“Whilst we have some variable cost like the number of people picking and delivering, the public sector contracts require delivery to every postcode. There’s a limit to how much cost you can take out.

“Not all of the wholesalers will survive and that means disruption to supply. The thing that’s galling for us is that the wholesale sector and supply chains in general have had no sector-specific support.”

The Treasury is understood to believe that financial packages on offer for some struggling hospitality businesses is, by proxy, support for the supply chain.

The Treasury said: “We’ve put in place a comprehensive plan to protect, support and create jobs, with more than £200bn of support since March – with particular support for the hospitality sector and it’s [sic] wider supply chain.


“And our winter economy plan will ensure this continues in the difficult weeks and months to come – providing a toolkit of support for all situations.

“Our expanded job support scheme will protect jobs in businesses that are open or closed, we’ve increased grants for firms required to close and are providing additional funding for local authorities and devolved administrations.

“This is alongside existing support measures including extended VAT cuts, businesses rates holidays and our extended loan schemes.”



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