UK food wholesalers plea for financial aid to avoid closure
Jemima Walker and Tim Hanlon
Europe;Europe
02:35

Wholesalers may have gone under the radar but they, like restaurants and all areas of the food supply chain, have been badly affected by COVID-19 and many could fold in the UK without more aid.

It is true that coronavirus has had an impact from farm to plate and wholesalers that supply food to restaurants, hotels and the public sector are struggling.

A new survey published by the UK government's Department for Environment, Food and Rural Affairs (Defra) shows half of the UK's wholesalers could fold by the end of the year – without sector-specific support.

The data were gathered by the Federation of Wholesale Distributors (FWD), on behalf of Defra, and its CEO, James Bielby, says the pandemic has been particularly hard on wholesalers because, unlike some businesses, they couldn't simply shut up shop and furlough their staff.

"The problems of the shutdown haven't gone away and the financial peril that wholesalers find themselves in is the same, if not worse," he said.

According to the FWD, when lockdown started 70 percent wholesalers' business disappeared. However, those wholesalers still had to carry on trading because they had public sector contracts with care homes and the NHS to honor. So, they were still operating with fixed costs, high overheads but trading at a loss because of the drop in commercial income.

HG Walter managing director Adam Heanen says the butcher lost 90% of its business overnight. /CGTN

HG Walter managing director Adam Heanen says the butcher lost 90% of its business overnight. /CGTN

HG Walter is a UK butcher, which supplies some of London's best-known restaurants. Managing Director Adam Heanen said when lockdown started on 23 March it lost 90 percent of its business overnight but has managed to recoup some of that revenue by starting a successful home delivery service.

"One hundred percent it was the most testing and challenging time for our business. There was perhaps a 48-hour period where overnight you have lost all of your customers," he said.

Some businesses have been able to adapt by implementing a direct-to-consumer business model, but many aren't so lucky. There are fears that as the hospitality sector starts to reopen there will be a race to the bottom, with businesses undercutting each other in an attempt to claw back losses.

 

Check out The Pandemic Playbook, CGTN Europe's major investigation into the lessons learned from COVID-19