MINISTER FOR HOSPITALITY
The Westminster Hall debate took place this week in response to the petition calling for a dedicated hospitality Minister. Support for both a Minister and extended support for hospitality was strongly expressed with our Chairman, Mark Pawsey, arguing the need for support for the supply chain. He said: “I spent 30 years as a supplier to the catering trade. We are missing our pubs, cafés and restaurants right now. When they are not operating, it has a significant effect on the suppliers to the sector. Although I welcome the support that the Chancellor has spoken about .. .many of the suppliers are not receiving the same level of support as the trading companies.
“During the pandemic, we have seen food purchases transferred from out-of-home to in-home consumption, and the beneficiaries have been supermarkets. It is often assumed .. suppliers and food manufacturers are able to switch production and pivot to supplying retail, but catering and retail products are very different, and as a consequence those businesses are losing out. Foodservice businesses continue to pay bills such as rent, electricity for chillers and loan payments for vehicles that are often standing idle. Wholesale distributors are usually high-volume, low-margin businesses, and the fixed costs mean that a relatively small fall in sales has a disproportionate impact on profitability. Too long a period without profit will cause many suppliers to fail.
“In addition, the catering trade – restaurants and pubs – often use the cash sales generated in the current period to pay for goods received in the previous period when they were trading. That has led to many suppliers becoming banks and funding their customers. There is very little action that those suppliers can take if the hospitality businesses do not have the cash to pay them. I hope that the Minister in his response will show his appreciation for the supply chain, as well as for valued hospitality businesses.”