The Scottish Wholesale Association has welcomed this week’s confirmation by First Minister Nicola Sturgeon that Scottish wholesalers will be able to access much-needed hardship grant funding to help businesses which can remain open but are directly constrained by the Scottish Government’s new five-tier local Covid restrictions which come into effect on 2 November.
Businesses which can remain open, but are directly constrained by the measures, will be eligible for grants worth £1,400 or £2,100, based on rateable value. This support is in addition to the UK Government’s new Job Support Scheme launching on 1 November and means that from 2 November, wholesalers will be eligible for these grants every four weeks for as long as the restrictions last.
Clarity on funding followed a question in the Scottish Parliament by Brian Whittle, the Conservative MSP for South Scotland, who said during a debate on the Scottish Government’s ‘Covid-19: Scotland’s Strategic Framework’ that wholesalers were “haemorrhaging cash”. He told Parliament: “It is not just the hospitality industry that is suffering – the whole food supply chain is under threat.”
Whittle raised the plight of Scotland’s foodservice wholesalers which lost, on average, 81% of their business when coronavirus closed hospitality, tourism and leisure businesses in March. He said: “The Government needs to speak to the Scottish Wholesale Association, which will tell it the stark reality of the cliff edge that it faces in a sector that is worth £2.9 billion to Scotland and supplies some 5,000 convenience stores, as well as hospitals, schools, prisons and hospitality businesses.
“Wholesalers have high overheads and carry significant stock, but have been left out of the support schemes such as that which provides rates relief.
“If supply chains fail, they will be extremely difficult to rebuild. There will be a post-Covid period, so business needs to know that preparations and plans are being made to which they can work – they need to know that there is light at the end of the tunnel so that they can be confident about retaining their employees.”
Whittle referenced a major wholesale owner who said his business was “haemorrhaging money to the extent that he is considering shedding 70 staff because he does not know what is coming down the line”. The MSP added: “He has only a fraction of his delivery trucks out there and they are running half empty while trying to maintain supplies for his customers who are still able to carry out some trading.
“Many businesses that traditionally work to a one-year, three-year or five-year plan currently cannot plan even a week in advance. Continually opening up and shutting down is unworkable. Business is not a tap that can be turned on and off – it might be easy to shut it down, but it takes time to turn the tap back on.”
Scottish Wholesale Association Chief Executive Colin Smith (pictured) said the trade association has now written to the First Minister and Finance Secretary Kate Forbes requesting a meeting to outline first-hand the “reality of the cliff edge” and the impact it will have on public-sector contracts should wholesale not receive targeted sector support.
He said: “We certainly welcome the clarity from the First Minister that this much-needed hardship grant, part of the ‘Covid-19: Scotland’s Strategic Framework’ support, will be accessible to wholesalers especially when members have already been declined, by some local authorities, the one-off hardship grant that was implemented at the start of the current ‘brake period’ to support businesses that were severely restricted but not closed.”
“We also welcome First Minister Nicola Sturgeon’s statement that businesses need more support and are calling on the UK Government to give additional funding to the Scottish Government for this to happen.”
