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Cash lifeline for food and drink wholesalers struggling due to coronavirus restrictions

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Wholesalers who have been hit by coronavirus restrictions will benefit from a fund which it is hoped will provide them with a vital lifeline.

A new Scottish Wholesale Food and Drink Resilience Fund has been established by the Scottish Government to help qualifying wholesalers affected by coronavirus restrictions cover fixed costs for a six-month period from October 2020.

This sector-specific grant aid follows months of lobbying by the Scottish Wholesale Association and will provide a lifeline to wholesalers which have, in some instances, lost up to 95% of their foodservice income due various licensed and hospitality Covid-19 lockdowns.

The fund will be targeted at food and drink wholesalers that sell to hospitality, on-trade or public sector clients who have seen sales fall by 20% or more since March. It is intended to cover the shortfall in revenue and fixed operating costs such as business rates, rent, loan repayments, utilities and insurance as well as specific costs such as the loss of stock.

Support

Colin Smith, chief executive of the Scottish Wholesale Association, said: “The Scottish Wholesale Association is delighted that food and drink wholesalers, who are the ‘wheels to Scotland’s food and drink industry’, have been given this vital lifeline.

“This support package will help secure many family businesses and SMEs across the length and breadth of the country – some having lost up to 95% of their income.

Colin Smith, chief executive of the Scottish Wholesale Association.

“While the sector still faces significant challenges, as many of our hospitality and tourism customers remain closed or restricted, this funding will make a huge difference to the survival of many SWA members, protecting food supplies into our 5,000 local convenience stores but especially into our hospitals, care homes, prisons and schools.”

Mr Smith added that the SWA is grateful for the lifeline from the Scottish Government and praised them for their intervention.

He continued: “The Scottish Wholesale Association and our members are thankful and relieved that the Scottish Government has recognised the hardship felt by wholesale businesses as a result of coronavirus.

“The Scottish Government has done more than any other UK government by recognising the key role that food and drink wholesalers play in the supply chain and in delivering this wholesale sector-specific fund.

“While the sector still faces significant challenges, including Brexit, this funding will make a huge difference to the survival of many businesses – potentially giving security of employment to over 6,000 directly employed staff, and hope for public and private sector customers who rely on Scotland’s supply chain.”

Mr Smith continued: “We appreciate, however, that £5m won’t necessarily give the full support required by everyone, and given the complexities of the food and drink wholesale sector and the different types of wholesale businesses, SWA will be working closely with the Scottish Government to ensure our members get the financial and other business support they need.”

Severe impact

The Scottish Government said it recognised that Covid-19 restrictions have had a severe impact on the food and drink wholesale sector, particularly for businesses that sell into hospitality.

Many have seen a significant proportion of their business disappear and are operating at a fraction of pre-pandemic levels as a result of venues being forced to close or limit trading.

Fergus Ewing MSP.

Rural Economy Secretary Fergus Ewing said: “2020 has been an extremely difficult year across the entirety of the tourism and hospitality sector. But it’s not just businesses who have been forced to close that are suffering – there is often a complicated supply chain that suffers too.

“We recognise that many food and drink wholesalers have lost huge amounts of business almost overnight, in addition to suffering stock loss and other costs as a result of their customers closing.

“This is affecting the long-term viability of these previously profitable businesses, so we’ve worked closely with the Scottish Wholesale Association to target this funding specifically at those that need it most and help them get through a tough winter.

“Many of the wholesalers serving the hospitality sector that have been particularly badly hit are the same wholesalers we rely on getting food to rural and remote areas as well as ensuring continuity of public sector food provision. It is paramount these businesses are able to continue operating and ready to support the hospitality sector as it recovers.”

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