The UK’s food and drink supply chain is in “danger of collapse” due to local curfews and downward demand for hospitality, trade bodies have warned.
In a letter to chancellor Rishi Sunak, associations including the Food and Drink Federation and the British Beer and Pub Association said they had “grave concerns” over the provision of food to the public sector without further government support for the industry.
The letter said: “Commercial revenue from the 70% of turnover distributed to the private hospitality sector underwrites the 30% of business supplied to public sector contracts.
“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.
“Wholesalers send specialist food to care homes and this cannot be replaced by deliveries from supermarkets. The same supply chain is also essential to the ongoing supply of food to primary and secondary schools for the provision of school meals.”
The hospitality sector in the UK has been widely impacted by restrictions put in place to limit the spread of coronavirus since March. In the latest restrictions set out by the government in England, restaurants and pubs must be closed by 10pm.
In areas classed as ‘high’ risk, there are restrictions on multiple households meeting indoors while in ‘very high’ risk areas, some pubs and bars have been forced to close.
The organisations warned that “job losses, business and site closures are a reality” unless the government extends its Covid-19 support measures to the hospitality sector and the distributors that supply it.
The letter called for measures to ensure continuity of “critical” public sector food and drink supply including extending the furlough scheme in areas listed under tier two and three restrictions, extending business rates relief to the wholesale sector and introducing discretionary grants to supply chains at the risk of collapse.
James Bielby, chief executive of the Federation of Wholesale Distributors, one of the signatories to the letter, said: “It’s a clear anomaly that this part of the hospitality sector has not received the support that its customers have had.
“It’s particularly anomalous that the supermarkets, which have benefited from the closure of pubs and restaurants, have received substantial business rates relief while the wholesalers who provide essential supply to the health, education and care sectors have not.”
The Treasury told the Guardian: “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.”
Meanwhile, John Allen, chairman at Tesco, warned there could be short-term shortages of some fresh foods when the Brexit transition period ends on 1 January 2021.
In an interview with Bloomberg, he said: “We can’t rule out the possibility that if there is dislocation at the ports of entry to the UK there will be some shortages of some items of fresh food, at least for a short time.”
However, Allen said there was no need for consumers to stockpile as he expected disruptions to “normalise quickly”.
“The nation’s supply chain for food will continue but there may be some things we have to learn to live without for a few weeks, possibly a few months,” he said.
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