Credit insurance crisis

Credit insurers are becoming more reluctant to grant cover to suppliers and businesses as the recession deepens, putting the drinks industry further at risk in 2009.

Suppliers feeling the worst effects of recession are finding it harder to protect themselves from bad debts with credit insurance, which in normal economic times would see them compensated by up to 90% in the event of a customer being unable to pay their bills.

On and off-trade retailers are now at high risk as insurers back away from granting cover, even if there performance appears stable.

Chief Executive of WSTA, Jeremy Beadles, has accused credit insurers of putting the struggling industry under more pressure.

"It's about ensuring that that the decisions they're making identify real risk in a business and they're not suddenly finding problems with companies they were quite happy to inure a month ago."

He said that suppliers and retailers are encountering the same problems.

The Association of British Insurers' director general, Stephen Haddrill said that, in 2008, the number of claims handled by insurers jumped by 31%.

He also said that insurers are predicting a 50% rise in corporate insolvencies next year.

• Sommeliers