Coronavirus: Morrisons moves to back suppliers

By Rod Addy contact

- Last updated on GMT

Coronavirus cases in the UK had reached 590 by 12 March
Coronavirus cases in the UK had reached 590 by 12 March

Related tags: Supply chain

The Coronavirus outbreak has prompted Morrisons to launch measures to support suppliers after Prime Minister Boris Johnson announced the UK had shifted to the 'Delay' phase in its efforts to tackle the virus.

Morrisons said it would move to immediate payments for its smaller goods for resale suppliers, with the aim of releasing payment to banks within 48 hours to help support their cashflow during the ongoing coronavirus pandemic.

For a temporary period, all goods for resale suppliers in these groups would be paid as soon as their invoice was received and their payment would be fed into the banking payments system, the business confirmed. Currently its smallest food suppliers were on 14-day payment terms, it claimed.

The supermarket chain said it would also temporarily re-classify a smaller supplier from those with £100,000 of business-a-year with the company to those with £1m of business. That would mean that an extra 1,000 small food businesses will qualify for the new payment terms.

The move will help businesses that provide up to £1m of turnover with Morrisons, including suppliers of local food and farmers that deal direct with Morrisons, such as those providing eggs and livestock. 

David Potts, chief executive of Morrisons, said: “We are Britain’s biggest single food maker and we want to be there for the smaller food makers, farmers and businesses that supply Morrisons. We’re a British family business and we will be doing our best to support them through this challenging period.”

Eustice: measures will support farmers and food producers

Environment Secretary George Eustice said: “These measures will support our farmers and food producers in their vital work of feeding the nation.

“We already have a highly-resilient food supply chain in this country and I am continuing to work closely with Morrisons and other retailers on their response to coronavirus. The government has pledged £30 billion in this year’s Budget for those affected and we’ve been clear that we will do whatever it takes to support people and businesses.”​ 

Morrisons said 3,000 small suppliers, including 1,750 farmers, would benefit from the measures. 

The retailer said it would start the temporary payment terms next week and it is expected they will last until the end of May before being reviewed.

Scottish salmon exports

Releasing a statement on the impact of the Coronavirus on Scottish salmon exports, Hamish Macdonell, director of strategic engagement for the Scottish Salmon Producers Organisation (SSPO), said: “Our top priority is, and always will be, the health and wellbeing of people everywhere and this includes those working in our sector and our customers. That is why we are determined to play our part in ensuring this crisis eases as quickly as possible.

“However, as the UK’s top food export, Scottish salmon is prominent in a number of key markets which are now facing restrictions – of various sorts – because of the Coronavirus outbreak. This has led to problems in getting salmon to our customers in different parts of the world, problems which are likely to get worse before they get better. As a result, we are working with the Scottish and UK governments and environmental regulators to keep fish in the water for longer, where this is appropriate, and looking at other measures to give our members more flexibility in dealing with these market disruptions.

“It has so far been relatively straightforward working through these measures as the preparatory work was done ahead of a possible ‘no deal’ Brexit last year, when similar market problems were anticipated. It is worth noting, however, that the UK market for salmon remains strong at the moment as customers stock up in anticipation of further restrictions at home and some of our member companies are looking actively at market substitution as a way of coping with the ongoing drop off in demand from other parts of the world."

Boris Johnson: 'Worst public health crisis for a generation'

Johnson, who called the spread of COVID-19 "the worst public health crisis for a generation", ​advised: "From tomorrow​ [13 March], if you have Coronavirus symptoms, however mild, either a new and continuous cough​ or a high temperature​ you should stay at home for at least seven days." ​He also stressed: "It is still more vital than ever to remember to wash our hands."

He said that now was not the time to be closing schools and that according to scientific advice, this could do more harm than good. He advised schools to close only if they were specifically advised to do so. Speaking at the same press conference, the Government's chief scientific adviser Sir Patrick Vallance explained closing schools would have limited effect on stopping the spread of the virus: "There's some effect to closing schools, but it's minimal and it would have to be for 14-16 weeks."

The Government was currently considering whether or not to ban major public events, said Johnson. It would have little effect on the spread of the disease, but such events could place an unnecessary burden on public services at the wrong time. The second phase follows the first 'Containment' stage. "We have done what can be done to contain the disease,"​ he said. "This is the worst public health crisis for a generation."

The Government's chief scientific adviser Sir Patrick Vallance said 5,000 to 10,000 people in the UK were currently likely to be infected. "The actions we are taking now to delay the peak and to push the peak down." ​He also stressed: "We cannot emphasise too much the point about washing hands. This is actually an incredibly powerful public health intervention."

Budget measures

The progress of COVID-19 has been rapid​ and has already caused panic buying and stockpiling. The Government promised special measures to help businesses deal with the outbreak in the Budget on 11 March.

They include a new Coronavirus Business Interruption Loan Scheme, ​delivered by the British Business Bank. That will enable businesses with a turnover of no more than £41m to apply for a loan of up to £1.2m, with the Government covering up to 80% of any losses with no fees. This will unlock up to £1bn pounds to protect and support small businesses.

For businesses with fewer than 250 employees, the cost of providing 14 days of statutory sick pay per employee will be refunded by the Government in full. This will provide 2 million businesses with up to £2bn to cover the costs of large-scale sick leave.

Helpline

A dedicated helpline has been set up to help businesses and self-employed individuals in financial distress and with outstanding tax liabilities to receive support with their tax affairs. Through this, businesses may be able to agree a bespoke Time to Pay arrangement.

There will be a £3,000 cash grant to 700,000 of our smallest businesses, delivered by Local Authorities, and worth £2bn.

The Bank of England has cut interest rates from 0.75% to 0.25% and additional funding will be available for banks to increase lending, especially to small to medium-sized enterprises.

For the latest information and advice, employers and business owners should visit guidance for employers and businesses​.

William Reed food shows postponed

William Reed confirmed yesterday that it had postponed its UK food shows. Foodex and The Ingredients Show, which were due to be held from 30 March to 1 April, will move to 12 – 14 April 2021​ to coincide with the 2021 running of the William Reed UK Food Shows. Food & Drink Expo, Farm Shop & Deli Show and National Convenience Show will now take place at the NEC on the 7 – 9 September 2020.

Two more deaths from the virus were confirmed in the UK as of 12 March, bringing the total number of deaths to 10. There are now 590 confirmed cases in the UK, an additional 134 since the 456 revealed on Wednesday.

The World Health Organisation has officially labelled the outbreak a pandemic​.

Four stages of Government plan to tackle COVID-19

The Department of Health and Social Care's action plan​ consists of four phases:

  • Containment: Prevent the disease taking hold
  • Delay: Slow the disease's spread if it does take hold and push the peak in cases further away from the winter to ease the burden on the NHS
  • Research: Intensify the search for the best medical means to combat the virus
  • Mitigate: provide the best care possible for the sick, minimise the impact on society, public services and on the economy

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