On 6 January, chancellor of the exchequer Rishi Sunak announced a new package of business support as the pandemic continues. He offered £4.6m of grants for businesses forced to close as a result of the third lockdown that was enforced this week.
However, concerns have been raised for the suppliers who have been negatively impacted by the loss of business due to these closures.
Richard Harrow, chief executive of the BFFF, said: “Yet again, food manufacturers, wholesalers and ingredient producers supplying the hospitality industry have missed out on the support for business announced by the chancellor yesterday.
“These businesses in the ‘squeezed middle’ have not been given the same level of Government assistance as the businesses they supply, despite being as hard hit by the restrictions. The Government needs to extend targeted support to ensure these companies survive the winter and are able to bounce back, when the economy starts to recover with the roll out of vaccination.”
Harrow argued this third lockdown would be the ‘final nail in the coffin’ for many food manufacturers supplying the out of home market. Now, more than ever, these firms needed business rate relief and more flexibility about paying National Insurance contributions and VAT payments, he said.
Money all spent
“When similar measures were introduced in April of last year, members supplying the out of home market, reported drops in turnover of more than 70%,” Harrow added. “Back then they had some cash reserves to fall back on, but these have now been spent.
“I have written to the environment secretary George Eustice, explaining many of the ‘squeezed middle’ are often successful family-owned small-to-medium-sized enterprises, supplying the hospitality and foodservice sectors, and are now facing collapse.
“Support for this important sector is vital to ensure they continue to manufacture and supply world leading products, making the market so dynamic and vibrant. Their continued existence will be critical as the economy starts to recover.”