FWD calls for support as wholesaler failures predicted

By Michelle Perrett

- Last updated on GMT

FWD chief executive James Bielby has called for sector-specific support
FWD chief executive James Bielby has called for sector-specific support

Related tags: coronavirus

The Federation of Wholesale Distributors (FWD) is continuing to push for additional support for the sector, following news that a third of its members are at risk of ceasing to trade in the next three months.

According to a poll, carried out with FWD members by the Department of Environment, Food & Rural Affairs (DEFRA), 40 out of 119 respondents said they were at medium to very high risk of ceasing trading within the next three months. Half (61) said they would be at risk by the end of the year. 

These wholesalers represented £58m of sales to public sector customers within the next three months and £212m by the end of the year. 

 Those at risk reported sales totalling £376m (risk of ceasing trading in next three months) and £778m (end of the year) in 2019. 

The foodservice market was worth c.£11bn to FWD members in 2018. 

The poll revealed that size was the most important determinant of whether the company was at risk of ceasing to trade.

Small businesses

Of the 40, a total of 39 were small businesses with a turnover of under £45m and one medium business (£45m-£250m). 

During a session of the Environment, Food & Rural Affairs committee earlier this month, FWD chief executive James Bielby highlighted his concerns, especially with regard to foodservice wholesalers.  

He said that businesses supplying the hospitality sector had not received any Government support. 

FWD called for sector-specific support, such as a grants for the wholesale sector, similar to the one given to the hospitality, fisheries, dairy, retail and leisure industries. 

Detrimental

“The lockdown measures have had a detrimental effect on members, who are continuing to operate at a loss in order to continue to supply their public sector and care home customers,” ​said Bielby.

“They are having to use reserves and the Government support that has been generally available, but they haven’t had access to any specific support. Hospitality, retail and leisure businesses have had their rates waived and a grant from their local authority of up to £25,000. The businesses supplying into those outlets have had precisely nothing.”

During this session, Bielby also highlighted the challenges of diverting foodservice products into retail​.  

Related topics: COVID-19

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