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Scottish food and drink wholesalers to receive £5m resilience fund

Published:  07 December, 2020

A new Scottish Wholesale Food and Drink Resilience Fund has been established by the Scottish government to help wholesalers affected by Covid-19 restrictions to cover fixed costs for a six-month period from October 2020.

The sector-specific grant will provide a lifeline to wholesalers which have, in some instances, lost up to 95% of foodservice income due to various 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.

Colin Smith, chief executive of the Scottish Wholesale Association, which has lobbied hard for the sum, said the fund will provide a “vital lifeline” to food and drink wholesalers, which are the “wheels to Scotland’s food and drink industry”.

“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.

“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,” he said.

Businesses interested in applying to the fund must be able to supply evidence showing that they have been trading at a loss between April to September 2020.

 A calculation will then be made to predict the shortfall in revenue from October 2020 to March 2021 required to cover these fixed costs. Grants will cover up to 100% of the predicted shortfall.

Smith continued that £5m “won’t necessarily give the full support required by everyone”, given the complexities of the food and drink wholesale sector and the different types of wholesale businesses.

However, he assured members that the SWA would continue to work closely with the Scottish government to deliver financial aid for businesses.

While agreeing the grant, 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.

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.”

Applications to the fund must be submitted by 23:59pm on Sunday 12 December via the Scottish Wholesale Food and Drink Resilience Fund website.